French central bank lowers growth forecasts for next 2 years

GMT 11:59 2015 Friday ,04 December

Arab Today, arab today French central bank lowers growth forecasts for next 2 years

An employee holds up a French flag at the Paris Drapeaux flag factory in Gentilly
Paris - AFP

France's central bank on Friday lowered its economic growth forecasts for 2016 to 1.4 percent from a previous estimate of 1.8 percent and for 2017 to 1.6 percent from an anticipated 1.9 percent.

At the same time the Banque de France kept its growth forecast for this year at 1.2 percent.

"The outlook for a pick-up in activity and inflation remains subject to downside risks," the bank said in a statement, adding that the downward revisions were due to a slowing in global economic growth and potentially weaker business investment than expected.

The bank said France's economy picked up this year due to lower oil prices and the depreciation of the euro, which gave a boost to exports despite a slowdown in world trade that began in early 2015.

External factors however are expected to be less favourable over the next two years, while the positive effects of the fall in energy costs will gradually fade, thus making economic expansion in 2016 and 2017 slower than had been estimated in the previous projections in June, the bank said.

According to the Banque de France, the impact of the deadly November 13 attacks in Paris would be "transitory and limited" and would only temporarily affect confidence in the French economy.

French Finance Minister Michel Sapin said Thursday it was not possible at this stage to quantify the impact of the attacks on the economy.

The French government has forecast of growth "of at least 1.1 percent" this year and 1.5 percent in 2016.


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