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An acceleration of growth expected in the 3rd quarter

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The Bank of France expects a rise of 0.4 per cent of GDP in the third quarter of 2018, after an early-year slump.

After a first six months were disappointing, the French growth could recover in the third quarter of 2018. “The gross domestic product (GDP) would rise by 0.4% in the third quarter of 2018”, after 0.2% in the first and in the second quarter, said the Bank of France in its point of juncture of the end of July.

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However, this improvement should not be sufficient to achieve the objectives of the government. After the coup of slack in the first half, the minister of public Accounts, Gérald Darmanin, were lowering the last week that the growth forecast of the government. Until then valued at 2% this year, the minister considered that it would be “not inferior” to 1.8%.

The government has also confirmed its objective of reducing the public deficit to 2.3%, but with 0.4% growth in the third quarter, the government may have difficulties to fulfill its new purpose. Philippe Waechter, economist at Ostrum AM, believes that there should be “a spectacular comeback” in the third and fourth quarters” to achieve this, much greater than the estimate made on Wednesday of the Bank of France.

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According to Insee, the”acquired growth” for the current year -that is to say, the level that GDP would reach if the business had not grown by the end of the year is 1.3%. The public body expects 1.7% growth for the year as a whole. The Bank of France is more optimistic with a forecast of 1.8%.

In its draft finance law, voted in December, Bercy had expected 1.7% growth to 2018. But this figure had been raised to 2% in the framework of the stability programme (“PSTAB”) sent at the end of April in Brussels, regarded as the latest official forecast of the government.

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