France’s economy is set for sluggish growth in the first half of the year, as weak business activity and government austerity measures limit the impact of rising consumer spending, according to

a report from national statistics agency INSEE on Tuesday.

Following a 0.1% contraction in the fourth quarter of last year, INSEE predicts the euro zone’s second-largest economy will expand by just 0.1% in the first quarter and 0.2% in the second.

Consumer spending, supported by wage increases, is expected to rise by 0.4% in the first quarter and 0.2% in the second, providing some momentum. However, this will be partly counterbalanced by stagnant public spending, as the government implements higher taxes to curb its budget deficit, putting pressure on businesses. Photo by Arthur Weidmann, Wikimedia commons.