PARIS (AP) -- France is suffering its longest recession since 1949 as manufacturing and exports continue to be hit hard by the global economic slowdown, the national statistics agency said Friday.
The euro zone's second largest economy contracted by 1.2 percent in the first three months of the year compared to the previous quarter and by 1.5 percent in the fourth quarter of 2008, the INSEE statistics agency said.
The agency also slashed its estimate for the third quarter of last year, saying the economy shrank rather than grew during the period, putting the country in a technical recession -- usually defined as at least two consecutive quarters of economic contraction.
That means the French economy has been shrinking constantly since the second quarter of 2008, the longest stretch since 1949.
The French economy is now on track to contract by 3 percent this year, Finance Minister Christine Lagarde said in a statement following the INSEE report. That's double the government's previous forecast of a 1.5 percent decline this year, and follows the mere 0.3 percent growth recorded in 2008.
Lagarde said the goverment's forecasts are now in line with those of international organizations, which forsee a "gradual economic recovery in 2010."
French manufacturing continued its sharp slowdown in the first quarter, with automobile production down 12.8 percent on the quarter, the INSEE said. Exports shrank 7.2 percent, while consumer spending growth was stable at 0.2 percent.
The first quarter decline was slightly less severe than the 1.5 percent drop that the INSEE had forecast in March, when the statistics agency said the French economy was shrinking at the fastest pace in over 30 years.
The first quarter decline was slightly better than expected, said Tullia Bucco, an economist at UniCredit Group. "France continued to outperform its peers in the first quarter," Bucco said, but "there is no reason to expect that the country will systematically outperform the eurozone throughout the forecasting horizon."
Most analysts expect official figures to show that the euro zone shrank by 2 percent in the January-March period from the previous three month period -- even more than the 1.6 percent contraction posted in the fourth quarter of 2008.