France’s central bank issues improved growth forecast

15 Mar 18

The French central bank has revised up its 2018 economic growth forecast to 1.9%, following the strongest growth in six years.

The Bank of France upped its estimate from 1.7% in its last forecast in December after data revealed the economy had grown 2.0% in 2017.

It said that confidence indicators had held up better than expected. The IMF, OECD and European Commission have also raised their forecasts for the French economy’s growth.

The bank said it expects inflation, boosted by energy and tobacco prices, to reach 1.6% in 2018 compared to 1.4% in its December forecast.

It also cut its 2018 unemployment forecast to 8.9% from 9.6% in December following a sharper-than-expected drop in the rate at the end of last year.

Speaking on French radio, Bank of France governor Francois Villeroy de Galhau called on Emmanuel Macron’s government to continue with its economic reform programme even as the economy shows signs of strength.

He said: “If we want to keep growth at a high level, patience and perseverance are essential.”

Macron reversed a decade of defence budget cuts by approving nearly €300bn in military spending by 2025 and has pushed for military service to be compulsory.

Did you enjoy this article?

Related articles

Have your say

CIPFA latest

Related jobs