French minister warns of growth downgrade

PARIS - Agence France-Presse

Moscovici is not optimistic about French growth. AFP photo

Finance Minister Pierre Moscovici warned yesterday that France could revise down its growth forecast following gloomy figures from the Bank of France, saying “we’re adjusting that.”

 “It’s true there are several indicators that have raised questions, notably those of the Bank of France. We’re adjusting that,” Moscovici told France 2 television when asked if France would revise down its growth forecast.

President François Hollande promised during his election campaign to reduce public debt based on a forecast of 0.5 percent growth this year and 1.7 percent in 2013. But the Bank of France on June 8 cut its estimate for French growth, saying the eurozone’s second-biggest economy would now likely contract by 0.1 percent in the second quarter.

 The central bank previously expected growth to be essentially flat in the three months from April through June. If the figures are confirmed it would be the first quarterly contraction since France pulled out of recession in 2009. A second contraction in the third quarter would mean that France joined other EU countries like Britain, Greece, Italy, Portugal and Spain in recession.