France 'set for 2009 recession'

Nicolas Sarkozy is at the helm of a stuttering French economy

France will enter recession in 2009, according to Insee, the country's national statistics agency.

The agency says the French economy has shrunk by 0.8% in the last three months of 2008 and will contract by another 0.4% in the first quarter of 2009.

The figures are worse than predictions, which said the economy would shrink by just 0.1% from October and December.

France is eurozone's second biggest economy, and would be the latest major world economy to enter recession.

Figures have already shown that Germany and Japan have endured two quarters of negative economic growth, while economists in the US have declared that its economy has been in recession since earlier in 2008.

France only narrowly avoided negative economic growth between July and September, posting growth of 0.1%.

Insee also predicted that unemployment in France would rise to 8% by the middle of next year, up from 7.7% at the moment.