French central bank revises down growth rate for second quarter

The French central bank on Thursday revised down the growth rate for the second quarter from the previous 0.5 percent to 0.4 percent, as the manufacturing business sentiment indicator declined in May.

Before July, the central bank had kept its 0.5-percent prediction unchanged in two reports, and the national statistical bureau Insee also posted the same forecast.

Insee is expected to release the second quarter reading in mid-August. For the first quarter, Insee concluded an economic growth rate of 0.1 percent, down from an initial prediction of 0.2 percent.

On the same day, the central bank recorded a slightly declined business sentiment indicator at 100 in May, one point down from April.

The French government has targeted a full-year growth of 1.4 percent, which conforms with present forecast of international economic organizations.

The Paris-based Organization for Economic Cooperation and Development foresaw an average growth rate of 2 percent in France through both 2010 and 2011 in real GDP.

As the ongoing austerity measure is casting shade on subdued economic prospects, growth is likely to lose momentum in the months ahead, the central bank's report suggested.

[Source: Xinhua, Paris, 08Jul10]

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