French economy to resist euro zone downturn - central bank

French economy to resist euro zone downturn - central bank

Reuters  | Sep 17, 2019 17:10

French economy to resist euro zone downturn - central bank

PARIS (Reuters) - Strong job creation and household purchasing power will help the French economy this year resist a slowdown taking hold in other big euro zone countries, the French central bank forecast on Tuesday.

The euro zone's second-biggest economy is on course to grow 1.3% this year and next, the Bank of France said in its quarterly outlook, marginally trimming its 2020 forecast from 1.4% in June.

The forecasts lend credence to the government's economic outlook as it prepares a 2020 budget to be published at the end of the month based on expectations that the economy will grow 1.4% this year and 1.3% next year.

The French economy's relative resilience strikes a stark contrast with Germany as the euro zone's traditional powerhouse teeters on the brink of recession.

Less exposed than its northeastern neighbour to the global trade slowdown, French growth would be underpinned this year by a 1.3% increase in consumer spending, revised up from 1.1% in June, the central bank estimated.

Households' purchasing power would grow at the fastest pace since 2007 boosted by low inflation and an array of tax cuts President Emmanuel Macron has rolled out in concessions to anti-government "yellow vest" protesters.

The labour market would also offer a tailwind to the economy, with jobs being created much faster than expected only a few months ago. The central bank forecast the economy would add 271,000 net new jobs this year, revised up by 122,000 since June.

Although that rate of job creation was expected to slow from next year, the central bank estimated that productivity would pick up, helping boost wages in the coming years.

By the end of 2021, the Bank of France forecast the unemployment rate would stand at a 13-year low of 8.0%, down from 8.5 on average this year.

Related News

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Write a reply...
Please wait a minute before you try to comment again.

Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

English (USA) English (India) English (Canada) English (Australia) English (South Africa) English (Philippines) English (Nigeria) Deutsch Español (España) Español (México) Français Italiano Nederlands Português (Portugal) Polski Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 简体中文 繁體中文 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt हिंदी
Sign out
Are you sure you want to sign out?
Saving Changes


Download the App

More markets insights, more alerts, more ways to customize assets watchlists only on the App is better on the App!

More content, faster quotes and charts, and a smoother experience is available only on the App.