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2014 to be another year of near-stagnation for France – ING

FXStreet (Barcelona) - Analysts at ING Bank note France’s 2014 GDP growth to be barely better than 2013’s 0.4% as the 0.3% QoQ growth registered after two quarters of stagnation shows that the French economy is very weak.

Key Quotes

“Figures published this morning show that GDP growth in Q2 has been revised downwards to -0.1% after 0.0% in Q1. This makes the small rebound announced for Q3 a rather weak one.”

“Overall, only stock accumulation and public consumption contributed positively to GDP growth in the third quarter.”

“All in all, this leaves France with a weak growth outlook for the first half of 2014 and a bigger risk of seeing deflation dynamics developing.”

“This year growth is unlikely to be much higher than last year and, if the recent reforms do not improve household purchasing power (through tax cuts) and companies’ competitiveness quickly enough in 2015, there may be no recovery at all and a heightened risk of deflation.”

“We continue to think that the more-than-2% 2016-2017 growth hypothesis of the Stability plan remains far beyond reach.”

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