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Bank of France trims French growth, inflation estimates

France will see growth accelerate gradually in the coming years from 1.2 percent this year, although not as fast as previously estimated, the Bank of France forecast on Friday.


French President Francois Hollande looks on during a conference in Milan, Oct. 8, 2014.
Reuters
French President Francois Hollande looks on during a conference in Milan, Oct. 8, 2014.

The euro zone's second-biggest economy is on course to grow 1.4 percent in 2016 and 1.6 percent in 2017, the central bank estimated, trimming its forecasts from 1.8 percent and 1.9 percent respectively six months ago.

The benefits of a weaker euro on the economy and low energy prices on household purchasing power should fade somewhat in the coming years, the Bank of France said.

Against that backdrop, it said that inflation was now expected to be weaker than previously thought, forecasting a rate of only 0.1 percent this year, followed by 1.0 percent in 2016 and 1.5 percent in 2017.

Despite a weaker growth outlook, the Bank of France estimated that the government could meet its EU public deficit target of 3.0 percent of economic output in 2017 as long as it kept up efforts to rein in spending.

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