Bank of France Sees Economy Gaining Momentum in Third Quarterby
Central bank sees French economy expanding 0.3% in the quarter
French business confidence rises in July despite Brexit vote
The French economy is set to return to growth this quarter, the nation’s central bank said, as President Francois Hollande aims to cement a turnaround ahead of next year’s general election.
Gross domestic product will rise 0.3 percent in the three months through September, the Bank of France said Monday. That’s more optimistic than economists in a Bloomberg survey, who predict an increase of 0.2 percent. The latest forecast comes after the economy -- the euro zone’s second-largest -- stagnated in the second quarter.
A gauge of sentiment among French manufacturing executives rose to 98 in July, up from 97 in June, the Bank of France also said on Monday. Confidence in the services sector slipped, while sentiment in construction was unchanged from June.
The surveys are the first measure of the business mood in France after a month hampered by the fallout of the U.K.’s decision to exit the European Union and a terror attack which killed more than 80 people in Nice, southern France, on July 14. The reading adds to further signs of resilience after retail and services data also rose in July.
The turnaround of the French economy has taken center stage as the nation heads for a general election next year. While Hollande is pushing to liberalize business and employment laws, the country is still faced with unemployment near a record high and a frail recovery that lags that of the euro zone.
The Hollande administration, which predicts growth of 1.5 percent for 2016, is due to present an updated forecast for next year in September.