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UPDATE 1-French econ minister sees "bad" Q1 GDP -paper

Published 05/11/2009, 06:35 AM
Updated 05/11/2009, 06:40 AM

(Adds quotes, background)

PARIS, May 11 (Reuters) - French Economy Minister Christine Lagarde expects first-quarter gross domestic product data, due out on Friday, to be "undoubtedly bad", she said in a newspaper interview published on Monday.

She reiterated that the government will revise its growth forecast for the year, which currently stands at -1.5 percent, before meetings with euro zone finance ministers in June.

"The growth data for the first quarter of 2009 ... will be undoubtedly bad," she told Le Monde newspaper. "Like the data for the fourth quarter of 2008, it will show the extremely brutal shock we've been confronted with since the autumn."

Prime Minister Francois Fillon said last month the economy was likely to contract by 2.5 percent in 2009. Lagarde said other economists were more pessimistic, with the IMF seeing a 3.0 percent contraction and the OECD a 3.3 percent decline.

Worse-than-expected industrial output figures for March released earlier on Monday underlined the gloomy outlook, although several economists said the crisis had peaked at the turn of the year.

Lagarde said measures by governments around the world to stimulate the economy, as well as reforms in France, would boost growth.

"I believe in a gradual recovery," she said. She added that France was less threatened than Germany by the risk of deflation, and that consumption was holding up.

(Reporting by Sophie Hardach; Editing by Ron Askew)

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