French central bank lowers growth forecast for Q1

France's central bank, Banque de France (BdF), on Wednesday lowered its economic growth forecast for the first quarter of 2016 to 0.3 percent from a previous estimate of 0.4 percent.

The bank's monthly survey showed slowing industrial output that drove down production in the pharmaceutical and machinery sectors.

In February, orders declined, particularly those from outside France and prices were down, especially in commodities, the BdF noted.

For the third consecutive month, capacity utilization was stable at 78.2 percent last month, it added.

Based on the sentiments of business leaders, the French central bank expected industry output to increase in March.

The bank survey also showed dynamic information and communication sectors as well as the recovery of accommodation and food services which were hit hard by the terrorist attacks in the French capital at the end of 2015.

For its outlook, business leaders forecast a further rise in the sector's performance in the short term, the bank added.

Struggling to defend his economic credibility, French President Francois Hollande wants to accelerate growth by 1.5 percent and lower the budget deficit to 3.3 percent of the country's national output this year. He plans to do this through his economic reforms, improving competitiveness while pumping more funds into state-aided job creation. Endit