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Growth? "Oui" says Bank of France

Thursday, June 04, 2015 - 01:22

The Bank of France has forecast that growth in the euro zone's second largest economy would start to pick up from this year onwards after three years of virtual stagnation. But as Amy Pollock reports it's still lagging behind others.

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Europe's second largest economy has been stuck in the doldrums. But this year marks a turning point, So says France's central bank, predicting growth will hit 1.2 percent this year, rising to 1.8 percent the year after. The Bank of France also forecasting a welcome rise in inflation from 0.3 percent this year to 1.4 percent next year. London Capital Group's Ipek Ozkardeskaya says the central bank's positive projections come down to external factors. (SOUNDBITE) (English) MARKET ANALYST AT LONDON CAPITAL GROUP, IPEK O ZKARDESKAYA, SAYING: "The French economy is reacting positively to the ECB quantitative easing programme and getting over their structural rigidities and that is very good news for France." Certainly low oil prices and a favourable euro exchange rate are helping French businesses. The Bank of France is relying on a recovery in corporate margins to boost business investment - and crucially, job creation. That's key to a sustained French recovery. (SOUNDBITE) (English) MARKET ANALYST AT LONDON CAPITAL GROUP, IPEK OZKARDESKAYA, SAYING: "The only downside risk in France's situation is the combination of is the very rigid jobs market and that's going to be changing soon with all the reforms on the line." With the jobless total hitting another record high in April, the pressure is on for promised labour market reforms to materialise. President Hollande is bound to be hoping the improved economic outlook helps him - he says he won't run again without a jobs boost behind him.

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Growth? "Oui" says Bank of France

Thursday, June 04, 2015 - 01:22