Bank of France cuts growth fore­cast

The Pak Banker - - FRONT PAGE -

The Bank of France said growth this quar­ter will be weaker than pre­vi­ously an­tic­i­pated and con­fi­dence among man­u­fac­tur­ers fell the most in three years.

Sen­ti­ment among fac­tory ex­ec­u­tives dropped to 98 in Fe­bru­ary from 101 in Jan­uary, its big­gest de­cline since Jan­uary 2013, ac­cord­ing to a monthly sur­vey from the cen­tral bank. As a re­sult, the econ­omy will ex­pand 0.3 per­cent this quar­ter in­stead of 0.4 per­cent, it said on Wed­nes­day.

The drop in con­fi­dence is a sig­nif­i­cant in­di­ca­tion that a slow­down in emerg­ing-mar­ket economies such as China and Brazil is spilling over into Europe and may threaten France's first real re­cov­ery since Pres­i­dent Fran­cois Hol­lande came to power in May 2012.

"Among man­u­fac­tur­ers, pro­duc­tion and de­liv­er­ies showed a pause in Fe­bru­ary af­ter sev­eral months of in­creases," the Bank of France said. "Or­ders are slow­ing, par­tic­u­larly those from abroad."

The Bank of France's in­dexes of sen­ti­ment in both the ser­vice and con­struc­tion sec­tors were un­changed at 96 last month.

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