France’s economic growth is expected to climb back to around its historical average following the election of its centrist president, accelerating from disappointing expansion at the start of the year, according to the country’s central bank.
Latest estimates from the Bank of France forecast a 0.5 per cent GDP expansion in three months to the end of June – the period encompassing the two round presidential vote which culminated in the election of Emmanuel Macron last weekend.
Despite a wider upturn in the eurozone’s prospects, the French economy has lagged behind its major rival Germany since the continent’s debt crisis, and has not seen the strength of the growth rebound in the likes of Spain. French GDP growth softened to just 0.3 per cent in the first quarter of this year while unemployment has stuck around 10 per cent.
The newly elected Mr Macron has promised to relaunch the eurozone’s second largest economy, vowing to unlock growth potential by liberalising the country’s burdensome labour laws and reducing taxes for the entrepreneurs while bringing France’s troublesome budget deficit in line with the EU’s spending rules.
Higher growth should help Mr Macron meet the deficit limit of 3 per cent of GDP imposed on all eurozone member states by Brussels, while also eating into the country’s debt pile which ended the year at an above target 96.4 per cent in 2016 (EU limit: 60 per cent).
The European Commission will be releasing its latest outlook on the French economy and the eurozone’s wider prospects on Thursday.