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French economic growth ground to a halt at the beginning of the year as consumers tightened their belts and companies cut back on investment, data showed Thursday, indicating the wider euro zone recovery remains weak and vulnerable to setbacks.

In the first three months of 2014, the euro zone’s second-largest economy failed to grow on a quarter-on-quarter basis, data from the French national statistics bureau, Insee showed. The French economy had grown 0.2% in the final quarter of last year and economists polled by The Wall Street Journal expected a slightly smaller slowdown to 0.1% growth in the first quarter.

France is the first of several large economies to publish gross domestic product figures Thursday before the figure for the whole of the euro zone at 0900 GMT.

As France makes up over 20% of the euro-zone economy, its releases are often taken as a barometer of the overall health of the currency bloc.

The euro zone exited a long contraction in the second quarter of last year, but growth hasn’t been as strong in past economic recoveries and too sluggish to quickly bring unemployment down from record highs. Alongside weak growth, the annual rate of inflation has been below 1.0% since October, and well below the European Central Bank’s target of just under 2.0%. The ECB indicated last week that it is preparing to cut interest rates or take other stimulus measures when its governing council next meets in June.

In France, the economy escaped the deep contraction of the wider euro-zone. But it has fluctuated between contractions and slight growth every quarter over the last two years, scuttling President Fran├žois Hollande’s pledge to get unemployment to start falling.

After increasing taxes sharply in the first 18 months of his presidency, the Socialist leader changed his approach in January pledging to slash spending instead and cut taxes for business in a bid to get them to invest and recruit.

The GDP figures from Insee on Thursday indicate that Mr. Hollande’s policies still haven’t had an impact as investment by nonfinancial companies fell 0.5% in the first quarter from the previous quarter.

Consumer spending, which has steadied the French economy during the euro zone slump, also fell 0.5% over the same period, indicating rising unemployment and sales tax increases are weighing on households.

By William Horobin

Write to William Horobin at