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French GDP to stagnate in Q4
Source: Agencies |
November 10, 2011, Thursday
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Print Edition
Print Edition
THE French economy will stagnate in the last quarter of the year, the Bank of France said yesterday, the latest sign it is losing momentum as fiscal austerity and Europe's debt crisis depress private sector activity.
The forecast, the central bank's first for that period, was made in its monthly business climate report, which highlighted further weakness in the services and industrial sectors in October in the eurozone's second-largest economy.
Slowing growth has forced the government to announce a new round of tax hikes and budget cuts worth 65 billion euros (US$89 billion) over five years so that its deficit-reduction targets remain within reach.
The central bank said the sentiment indicator for industrial activity had fallen in October to 96 from 97 in September while its index for the services sector fell to 95 from 96 the previous month.
It said business managers in the industrial sector had reported that activity was stable but order books were down.
But service providers posted slower activity.
The Bank of France's estimate for the third quarter, for which official data is due next Tuesday, is for 0.1 percent.
The INSEE statistics office has forecast French growth of 0.3 percent in the third quarter and estimated the gross domestic product would stall in the last quarter of this year.
INSEE said in a report that managers in the industrial sector expect to tone down their investment plans next year.
The forecast, the central bank's first for that period, was made in its monthly business climate report, which highlighted further weakness in the services and industrial sectors in October in the eurozone's second-largest economy.
Slowing growth has forced the government to announce a new round of tax hikes and budget cuts worth 65 billion euros (US$89 billion) over five years so that its deficit-reduction targets remain within reach.
The central bank said the sentiment indicator for industrial activity had fallen in October to 96 from 97 in September while its index for the services sector fell to 95 from 96 the previous month.
It said business managers in the industrial sector had reported that activity was stable but order books were down.
But service providers posted slower activity.
The Bank of France's estimate for the third quarter, for which official data is due next Tuesday, is for 0.1 percent.
The INSEE statistics office has forecast French growth of 0.3 percent in the third quarter and estimated the gross domestic product would stall in the last quarter of this year.
INSEE said in a report that managers in the industrial sector expect to tone down their investment plans next year.
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