August 8, 2014 / 8:22 AM / 3 years ago

UPDATE 1-French economy seen growing 0.2 percent in Q3, industry grows in June

* BoF estimate for Q3 growth unchanged from Q2

* Industrial output grows 1.3 percent in June

* Second-quarter growth published on Aug. 14 (Adds industrial output, budget)

PARIS, Aug 8 (Reuters) - France's economy is seen eking out growth of 0.2 percent in the third quarter, the central bank said on Friday, while stronger-than-expected industrial output in June and upbeat consumer spending may support growth in the second quarter.

The Bank of France, in its first estimate for third-quarter growth, forecast that the pace of expansion in Europe's second-largest economy would be unchanged from an estimated 0.2 percent in the period running from April to June.

With official second-quarter growth data due to be unveiled on Aug. 14, Socialist Prime Minister Manuel Valls has managed expectations by giving a bleak assessment of the economy in a pre-holiday speech.

The government is expected to revise down its 2014 growth forecast, currently at 1.0 percent, bringing it into line with estimates for 0.7 percent growth from the International Monetary Fund and the country's own statistics agency.

However, despite stubbornly high unemployment above 10 percent, monthly data hinted that parts of the economy were improving, possibly supporting second-quarter growth.

The INSEE statistics office said that industrial output had grown by 1.3 percent in June from May, beating expectations, while consumer spending in the same period had risen by 0.9 percent, also beating forecasts.

But while such data could fuel expansion in the second quarter - which the central bank sees at 0.2 percent - economists say weak housing investment, lacklustre exports and high unemployment may erase any positive effect.

BNP Paribas economist Evelyn Herrman said the bank's estimate for second-quarter growth was unchanged at 0.2 percent.

"This said, the positive June print (industrial output data) generates some welcome carry over effects for Q3," she said in a research note.

The Bank of France also updated its monthly business climate report, putting its measure of sentiment in the industrial sector at 96, down from 97 in June.

Confidence in the service sector stood at 93, unchanged from June. (Reporting By Nicholas Vinocur; Editing by Andrew Callus)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below