Bank of France backs upoptimistic growth forecasts

13th May 2004, Comments 0 comments

PARIS, May 13 (AFP) - The French economy is heading for growth of 0.6 percent in the second quarter and should show growth of 1.9 percent by the end of the first half of the year, the Bank of France forecast on Thursday.

PARIS, May 13 (AFP) - The French economy is heading for growth of 0.6 percent in the second quarter and should show growth of 1.9 percent by the end of the first half of the year, the Bank of France forecast on Thursday.

The bank, publishing data which backs up, or even exceeds an unexpectedly strong growth trend shown in official data on Wednesday, explained that unless output declined later in the year, growth would be at least 1.9 percent in 2004.

The figure of 0.6 percent for the second quarter represented an upward revision of 0.1 percentage points.

On Wednesday, the official statistics institute INSEE reported that in the first quarter the economy had grown by 0.8 percent and a senior INSEE official commented that in the whole of the year the economy was likely to grow by close to 2.0 percent.

On Tuesday the Organisation for Economic Cooperation and Development had forecast that the French economy would grow by 2.0 percent this year and by 2.6 percent in 2005 after 1.1 percent in 2002 and 0.5 percent in 2003, a 10-year low.

So far the government has forecast officially that growth this year would be 1.7 percent.

France is counting on growth to help it eventually to reduce excessive public deficits to within eurozone limits and also to overcome some serious expenditure problems, notably the cost of welfare and health care.

In the light of the data on Wednesday, Economy and Finance Minister Nicolas Sarkozy asserted that the economy was running at an annual rate of growth of 3.0 percent.

The central bank also reported on Thursday that its index of industrial confidence had risen sharply in April to 105 from 102 in March and 94 in April of last year.

Industrial leaders had told the bank that that activity had increased further in April although at a slower rate than in March and orders particularly from export markets, had continued to rise.

©AFP

Subject: French news

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