French 2009 recession far deeper than thought

The French economy suffered an "historic contraction" of 3.1 percent in 2009 that was far deeper than first thought, figures released on Wednesday by the national statistics office INSEE showed. It lowered a previously announced contraction of 2.7 percent for the eurozone's second biggest economy. Successive crises since the collapse of US investment bank Lehman Brothers in 2008 have cost France an estimated seven percentage points of growth, or 140 billion euros ($178 billion) per year, an INSEE statement said. The impact of the lost growth would also lead to 70 billion euros of lost tax revenues over the next two or three years, added the statistics office. That has contributed to France's growing public deficit, said Eric Dubois, director of economic studies at INSEE. The data office added that the "French economy has not begun to regain ground lost during the great recession" of 2009. Two years after exiting recession, the French economy has only recovered to 2008 levels, while the manufacturing sector remained stuck at some 5 percent below pre-crisis levels. INSEE meanwhile raised its "semi-definitive" growth forecast for 2010 to 1.7 percent from 1.5 percent, while its prediction of 1.7 percent for 2011 remains unchanged.