PARIS, Feb 13 (Reuters) - French companies slashed jobs in the fourth quarter as the economy contracted at the fastest pace in 34 years, data showed on Friday, setting up the economy for a poor first quarter.
Gross domestic product contracted 1.2 percent in the final quarter of 2008, data from national statistics office INSEE showed, slightly worse than expectations for a fall of 1.1 percent.
"The first quarter will be difficult," Economy Minister Christine Lagarde told RTL radio. "We will have a difficult year."
A separate report from INSEE showed job creation fell 0.6 percent quarter on quarter, or 0.7 percent year-on-year.
A third report showed the Jan-Dec budget deficit grew to 56.2 billion euros from 34.7 billion euros a year earlier.
The reports tally with other grim data on the European economy. Germany registered its worst quarterly contraction since 1990, data on Friday showed. (Reporting by Anna Willard, Veronique Tison, Crispian Balmer, Tamora Vidaillet and Estelle Shirbon, editing by Mike Peacock)