France

RGE's Q3 2010 France Outlook

RGE lowered its 2010 GDP growth forecast for the French economy to 1.2% from the previous 1.4%. Downsides risks have increased since RGE’s April 2010 outlook. The positive impetus from private consumption, the main pillar of the French economy, will prove limited in 2010 given falling purchasing power and weak consumer confidence. While the economic recovery will broaden, given the positive contribution from the external sector, export growth remains constraint by weak recovery prospects in France’s main trading partners and the economy’s ongoing competitiveness challenges. Investment will see only gradual signs of improvements in 2010 given the ongoing uncertainty surrounding the economic recovery and still low capacity utilization rates.  Pressing fiscal consolidation needs will coincide with a slowdown in global in H2 2010 and the subsequent year. As a result, the economic recovery will prove less vibrant in 2011 despite the ongoing strengthening in household’s consumption. RGE expects GDP growth to slow to 1.0% in 2011.

Read the Q3 2010 France Outlook