French economy to increase through Q1 2013

Press Release   •   Feb 08, 2013 14:52 GMT

The French economy will avoid recession this year, according to the country's central bank.

It predicts growth of 0.1% in the first three months of 2013, a more upbeat outlook than that of many economists, who are discouraged by recent data.

The Bank of France's estimate was its first forecast for the period and could still be revised in subsequent monthly surveys.

France has the world's fifth largest economy by nominal figures and the ninth largest economy by PPP figures. It has the second largest economy in Europe (behind its main economic partner Germany) in nominal figures.

Economists are more pessimistic after recent weak data, including a January survey of purchasing managers, which showed the sharpest fall in manufacturing output since March 2009, contrasting with data for the wider eurozone, which showed the bloc had turned a corner.

Even if France manages to skirt a recession, the Bank of France's forecast is still modest, meaning the country will need to pick up momentum if it is to meet the government's official forecast for 0.8% growth this year.

Separate data released on Friday confirmed the central government deficit, which makes up the bulk of the budget deficit, stood at €87.2 billion for 2012, exceeding the official target for €86.2 billion.

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