The Bank of France forecasts growth of 1.2% in 2015 – L’Express

The Bank of France (BoF) was more optimistic Thursday that the government by publishing its first multi-year macroeconomic forecasts. It forecasts growth of 1.2% in 2015 and accelerated in 2016 and 2017, to 1.8% and 1.9% respectively. For its part, the government officially forecast growth of 1% this year and 1.5% for the next two years.

According to the Bank of France, the growth of gross domestic product (GDP) French should be supported by “the decline in oil prices and the exchange rate” of the euro. “The decline in oil prices at the end of 2014 should lead to savings on the French oil bill of 0.8 percentage point of GDP in 2015,” said BdF. Combined with historically low interest rates, this reduction should in particular have effects on household consumption.

Unemployment could stabilize

In addition, the depreciation of the euro supports the competitiveness of French companies. The BoF expects an increase of domestic exports by 5.4% in 2015 after 2.4% in 2014. In fact, she says, the trade deficit is expected to narrow to 1.9% of GDP in 2014 to 1.6 % in 2015 and 2016. Regarding the deficit, BdF expects 3.8% in 2015. It considers that “France should be able to meet its European commitments” and down below the 3% threshold, provided that it continue its budgetary efforts.

“Unemployment could stabilize in 2015 and decline gradually from 2016″ further advance the Bank of France. The latter predicted a rate of 10.3% in 2015, then flowing back to 10.1% in 2016 and 9.6% in 2017. In April 2015, the unemployment rate in France recorded a record increase. The number of unemployed with no activity reached 3.536 million, an increase of 0.7% compared to the previous month.

The Bank of France is cautious

The institution, however, warns that “slower global growth”, “a significant rise in oil prices “,” strong movements in the foreign exchange market “or” geopolitical crises “could affect its scenario. Similarly, forecasts for 2016 and 2017 do not take into account the budgetary measures announced in the stability program submitted by France in Brussels. Measures that have not yet been specified in the laws of Finance.

Still, these projections – like those of the European Commission, the OECD and the IMF – are higher than the official government figure. The latter chose caution and maintains its forecast of 1% average growth this year. However, the Department of Finance experts aimed growth of 0.4% for the second quarter of 2015, bringing annual growth to 1.2% or even 1.3%.