France's 2016 growth forecast lowers to 1.3 pct

The estimated growth of the eurozone's second main power is 1.3 percent this year, down three percentage points from a previous forecast due to unexpected negative performance in the second quarter, the French statistics bureau Insee said on Thursday.

After falling by 0.1 percent in the second three months of the year, the country's gross domestic product (GDP) will quicken by 0.2 percent in the third quarter before recording a 0.4-percent rise for the October to December period.

This expected quarterly growth rate will lead to a full-year growth below the official target of 1.5 percent.

The French statistics institute attributed 2016 growth to a 1.5-percent increase in consumer spending and a 3.6-percent jump in corporate investment, the strongest pace since 2011.

An expected faster growth for 2016 compared to last year's performance will help millions of job seekers and bring down the unemployment rate to 9.5 percent in France's mainland, down four percentage points from last year.

"Insee forecasts do not challenge either our public deficit target for 2016, or our growth forecast for 2017," French finance minister Michel Sapin was quoted as saying by local media.

Sapin added "French growth remains strong," thanks to "strong recovery in business investment" which helps to create dynamism in the domestic labor market. Endit