PARIS (Reuters) - U.S. investment bank Bank of America Merrill Lynch has raised its forecasts for French GDP (gross domestic product) growth, saying there were some positive signs from the election of Emmanuel Macron as president.
Bank of America Merrill Lynch raised its 2017 economic growth forecast by 20 basis points to 1.3 percent, and it increased its 2018 forecast by 10 basis points to 1.4 percent.
The U.S. bank said it was expecting Macron’s party (En Marche) to get enough power in the lower house of parliament to carry out economic reforms.
“Our scenario....is conditional on En Marche either securing a majority on its own, or close enough to the threshold so that governing with moderates from the Socialist Party or Les Republicains would allow i) a prudent fiscal policy, with only a small measure of additional austerity; ii) the continuation of a drop in corporate/payroll tax supportive of investment, via improved margins, and employment,” BAML wrote in a note.
Reporting by Sudip Kar-Gupta; Editing by Dominique Vidalon