(Adds trade balance, budget data, details)
PARIS, July 8 The French economy grew only 0.2
percent in the second quarter after stalling in the first three
months of the year, the French central bank said on Tuesday,
while the trade deficit widened in May from the previous month.
France's recovery is falling behind other euro zone
countries as data shows the euro zone's second biggest economy
failing to pick up speed.
President Francois Hollande has sought to stimulate growth
and hiring by pushing through hefty payroll tax cuts designed to
make companies more competitive, but the effects have yet to
show in economic data.
The Bank of France's estimate was unchanged from a previous
projection, which also pegged growth during the period from
April through June at 0.2 percent.
Underscoring a lag with Germany, which has a hefty current
account surplus, France's trade deficit widened in May to 4.9
billion euros from 4.1 billion euros the previous month, data
from the customs office showed.
The weak start to the year risks derailing the government's
forecast for 1.0 percent growth this year, upon which it has
built its budget. Any shortfall could put France's
deficit-cutting promises to its EU partners at risk.
The central bank updated its growth estimate in its monthly
business climate report, which put its measure of morale in the
industrial sector as unchanged - at 97 - from May. A figure
below 100 is below the long term average.
Confidence in the services sector was also flat - at 93 -
compared with the previous month.
Separately, the Finance Ministry said the budget deficit had
fallen to 64.3 billion euros at the end of May from a deficit of
72.6 billion euros a year earlier.
(Reporting by Nicholas Vincour; Editing by Andrew Callus)