France set for 0.3 per cent growth in third quarter

The Bank of France yesterday forecast that the French economy would expand by 0.3 per cent in the third quarter, following growth of 0.4 per cent in the previous quarter.

The French statistics bureau INSEE is expected to publish its growth figures for the second quarter on Friday.

In June, INSEE said that gross domestic product would expand by 0.5 per cent in the second quarter, a boost for the economy which showed weak growth of 0.1 per cent in the first quarter.

The rebound should continue “at a slow pace” with quarterly growth in the region of 0.4 per cent in the second half of 2010, INSEE said.

France experienced a recession last year of 2.5 per cent.

The government is expecting growth of 1.4 per cent for the whole of this year. This is in line with forecasts by INSEE and by leading international organisations such as the International Monetary Fund and Organisation for Economic Co-operation and Development.

An indicator of the business climate published by the Bank of France yesterday was steady in July at 101 points, slightly above the long-term average of 100 points.

The bank said that in July industrial activity had advanced in the same way as in June with all sectors performing favourably. The rate at which productive capacity was being used was little changed but remained below the long-term average. Order books and inventories of finished goods were steady at about normal levels.

In the services sector, the indicator of business confidence slipped to 96 points from 97 in June.

Activity continued to advance, supported by temporary work. “The outlook is for an acceleration of activity in the next few months,” it said.