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French economy shrank in fourth quarter of 2012 French and German economies contracted at end of 2012
(35 minutes later)
The French economy - the eurozone's second largest - contracted by 0.3% in the fourth quarter of 2012. The German and French economies both contracted in the final three months of 2012, official figures have shown.
That was slightly worse than analysts had expected. It compares with growth of 0.1% in the third quarter. Germany - the eurozone's largest economy - saw its GDP shrink by 0.6% as exports declined.
Some economists have predicted France is heading for a recession - usually defined as two consecutive quarters of contraction. That was the deepest contraction since the first three months of 2009 - the height of the financial crisis.
However, the central bank recently predicted that the economy would expand in the first three months of 2013. The French economy shrank by 0.3% in the fourth quarter. Both numbers were worse than most economists had forecast.
Some analysts have predicted France is heading for a recession - usually defined as two consecutive quarters of contraction.
However, France's central bank recently forecast that the economy would expand in the first three months of 2013.
The French President Francois Hollande is trying to make France more competitive by slashing government spending and relaxing labour regulations.
'Outlook promising'
The German statistics office said: "Comparatively weak foreign trade was the decisive factor for the decline in the economic performance at the end of the year: in the final quarter of 2012 exports of goods declined significantly more than imports of goods."
But economists remain upbeat about the outlook for Germany.
"This is a temporary period of weakness in the German economy rather than the beginning of a long period of stagnation or even a recession " said Andreas Rees, chief German economist at the bank Unicredit.
He added: "The outlook is very promising. The chances that the economy will return to growth at the beginning of this year are very good."