Growth to pick up after bad start to '14: France
April 5, 2014, 12:09 am TWN
PARIS--France's economy barely expanded at the start of this year, but growth should pick up if fall short of government forecasts, the national statistics agency said Thursday.
INSEE's forecasting arm said in its quarterly outlook report that it believes the French economy expanded by 0.1 percent in the first quarter.
The Bank of France last month forecast 0.2-percent growth for the January to March period.
Both their forecasts are a slowdown to the 0.3-percent growth rate that France turned in for the final quarter of last year.
A first estimate of first quarter gross domestic product growth is due in May.
INSEE expects growth to pick up to 0.3 percent in the second quarter, and for the economy to expand 0.7 percent for the year as a whole.
The government forecasts 0.9-percent growth, and a slower expansion could make it difficult to meet revenue targets and keep its promises to the EU on reducing the public deficit.
A 0.7-percent expansion would still be a considerable improvement to the 0.3-percent growth that France recorded in 2013, however.
INSEE said “the recovery is likely to be consolidated” in the world's advanced economies in the first half of this year, with the eurozone as a whole expanding by 0.4 percent in the first quarter and by 0.3 percent in the second quarter.
“World demand for French products should therefore return to a regular, sustained rate of progression through to mid-2014,” said INSEE.
However, exports “continue to be hit by the past rise in the value of the euro,” INSEE noted.
Overall, “the progression in activity in France should therefore remain modest” in the first half of 2014.
Meanwhile, the unemployment rate in metropolitan France should remain steady at 9.8 percent in the first half of the year.
Bringing unemployment down was one of the main campaign pledges of President Francois Hollande in his 2012 election campaign.