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French growth forecast trimmed to 1.2 percent, pick-up seen in fourth quarter - INSEE
December 15, 2016 / 5:20 PM / a year ago

French growth forecast trimmed to 1.2 percent, pick-up seen in fourth quarter - INSEE

PARIS (Reuters) - French economic growth will end the year on a more solid footing after two insipid quarters marred by strikes, fleeing tourists and weather-damaged harvests, national forecaster Insee said on Thursday.

Economic output will pick up to 0.4 percent in the fourth quarter, Insee said in its quarterly forecast note, after a small contraction in the second quarter and a weak rebound in the third, pushing growth to 1.2 percent for the full year.

That was slightly less than the 1.3 percent it had forecast earlier, however, and just short of the Socialist government’s recently revised target of 1.4 percent.

One of the main factors weighing on French growth this year was a collapse in agricultural production. Unseasonably cold and rainy weather caused the worst wheat harvest in 30 years and a nine percent drop in wine production.

That shaved 0.2 points off gross domestic product, Insee said.

Strikes at French refineries in the spring over the government’s labour reforms and a drop in tourism following deadly Islamist militant attacks in Paris and Nice also weighed on growth.

In 2017, Insee expects growth of 0.3 percent in the first quarter and 0.4 percent in the second, helped by a 1.1 percent pick-up in exports in the first half. Unemployment is expected to drop slightly to 9.8 percent by end-June.

However, stronger inflation and political uncertainty in an election year could weigh on growth, Insee added.

Reporting by Michel Rose and Yann Le Guernigou, editing by Larry King

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