French central bank sees 2015 growth at 1.2 pct

France will quicken its national output by 1.2 percent this year above the government estimate of 1 percent, the central bank, Banque de France (BdF) said on Thursday.

According to the bank's biannual macroeconomic projections, growth of the eurozone's second largest power would stand at 1.8 percent next year and 1.9 percent in 2017.

In its stability program for the 2015-2018 period, French government eyes a 1 percent growth of the country's gross domestic product (GDP) this year and to increase the figure to 1.6 percent in 2016 and in 2017.

The BdF attributed the expected boosted performance to a combination of external factors, such as cheaper oil and a weak euro in addition to expansionary monetary policy in the euro area and improvement of corporate profit margins at home.

"Our projections are subject to a number of downside risks. GDP growth would be weaker than expected in the event of a slowdown in global growth, sharp rises in oil prices or in the euro exchange rate, or the onset of geopolitical crises," the bank said.

"The expected recovery in business investment would be undermined if companies chose to use the gains from cuts to labour costs to raise wages or deleverage. Consumption would also be lower than expected if the household saving ratio failed to fall back towards its long-term average in 2016," it added.

As to unemployment, French central bank estimated a stabilization of job claims by year end and a gradual decline by next year at 9.6 percent.

The BdF biannual report is likely to be a good music to the ears of the beleaguered president Francois Hollande, France's most unpopular head of state on failure to fix the country's economic and financial troubles. Endit