Bank of France forecasts 0.1 pc growth

August 18, 2008

, PARIS, August 18  – France\’s gross domestic product (GDP) should be 0.1 percent in the third quarter of 2008, the Bank of France forecast Monday, as France\’s prime minister summoned key ministers to discuss the economy.

This preliminary estimate meant that growth for 2008 at the end of the third quarter — guaranteed growth in 2008 if the rate in the last two quarters is at least equal to zero — would be 1.0 percent, said the bank.

The latest news came as Prime Minister Francois Fillon summoned key ministers, including Economy Minister Christine Lagarde and Budget Minister Eric Woerth to a meeting Monday discuss the darkening economic outlook.

The bank released its latest figures in its monthly report on the economy.
But it was Thursday\’s figures published by France\’s national institute of statistics, INSEE, estimating that France\’s growth had dropped back to 0.3 percent in its second quarter, that prompted Fillon to summon his ministers.

The measure of confidence in the business and industry sector also published by the Bank of France, recorded a three-point drop in July to 92 points, from 95 in June.

Business chiefs surveyed by the bank said that industrial activity had remained stable in July. New business remained stable, despite a slight drop in demand from the European Union.

Orders were down but remained the normal level.

But business leaders forecast a drop in activity in the coming months.

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