The Bank of France (BoF) sees the French economy growing 0.2 per cent quarter-on-quarter in the third quarter, the same lacklustre pace it has forecast for the second, the bank’s July survey showed on Monday.
The forecast, the bank’s first for the July-September period, puts French growth at half the pace of the eurozone as a whole and underlines concerns that France is stuck in a rut following a spurt of 0.9 per cent in the first quarter.The French government forecasts the economy will grow 2 per cent in 2011 and 2.25 per cent in 2012, but many analysts are more downbeat for next year. France will publish its second-quarter GDP data on Friday.France and Germany have been propping up the euro zone’s tepid growth rate, and a slowdown in its second largest economy would drag the bloc closer to recession as it struggles to keep a lid on an escalating sovereign debt crisis.The BoF’s monthly survey showed French industrial activity posted a slight increase in July, underpinned by the transport equipment sector.A slowdown in service sector activity seen in June continued in July, notably in the information and communication businesses.The central bank’s business sentiment indicators slipped again, to 98 from 99, in both the industry and service sectors. Both indicators are below their long-term averages.
A drop in order book levels observed in June continued in July, although inventories of final goods were at normal levels. Many European economies are struggling to keep growing as big debt burdens force them to slash public spending.Most of the world’s largest economies are heading for a period of slower growth, and it is increasingly likely that the US will share that fate, according to the Organization for Economic Cooperation and Development’s composite leading indicators.The Paris-based think tank Monday said its leading indicator of economic activity in its 34 members fell to 102.2 in June from 102.5 in May, suggesting that economic growth is likely to slow.
From / Gulf Today