France's drive to slash spending and debt by implementing strict austerity measures has pushed the country into recession, confirmed the government's statistics office.
In the first quarter of 2013, French gross domestic product (GDP) in volume decreased by 0.2%, data from the national statistics office Insee showed. French GDP in the previous quarter also declined by 0.2%.
Consumer spending was down 0.1% during the first quarter, following a 0.1% rise in the preceding quarter. Gross fixed capital formation (GFCF) dropped again in the first three months of 2013 by 1%, after a 0.8% decline in the preceding quarter.
Overall, total domestic expenditure (excluding change in inventories) weighed down on GDP growth, according to Insee.
Imports inched up 0.2% in the first quarter of 2013, after declining 1% in the fourth quarter of 2012. Exports were down 0.4% in the first three months of 2013, and followed a 0.7% decline in the preceding three-month period.
Foreign trade balance contributed negatively to GDP growth at minus 0.2 points, after 0.1 points in the fourth quarter of 2012. Changes in inventories contributed slightly to GDP growth in the first quarter, at 0.2 points after a 0.2 points decline in the preceding quarter.
Contracting economic activity has fuelled unemployment in Europe's second-largest economy. French unemployment crept up to its highest level since 1998, after the number of jobless people in France hit 10.8%, in the first quarter of 2013. The jobless rate also grew by 0.3% in Q1 2013, from 10.5% in the last quarter of 2012, according to Insee.
French austerity measures seek to cut spending and debt.
Earlier this month, the International Monetary Fund urged France to become more competitive by "powering up" its reforms programme and bringing down labour costs, in order to close the ever-growing gap between itself and its European counterparts.
Stripping out burdensome regulations, from the labour market to planning law, would help speed up France's economic recovery, the IMF said.
The recession-hit country is expected to log a gradual turnaround in the second half of 2013.
France's neighbour Germany, Europe's leading economy, escaped recession in the first quarter, with GDP rising a mere 0.1%. However, growth fell short of economists' projection of a 0.3% increase in GDP numbers.