PARIS (Reuters) – France’s economy is set to grow faster than expected as a rebound gains momentum from the second half of the year, the French central bank forecast on Monday.
The economy was poised to grow 5.8% this year, well above the euro’s zone average of 4.6%, the Bank of France said, revising its forecast up by 0.4 percentage points from its last estimate in March.
The euro zone’s second-biggest economy was then on course to grow 4.1% in 2022 and 2.1% in 2023, up by 0.3 and 0.4 percentage points respectively from March, the central bank said in its quarterly economic outlook.
It said its monthly business surveys showed activity picking up already in the three months to the end of June, with quarterly growth expected at 0.5% from the previous quarter.
As coronavirus restrictions are gradually lifted and a vaccination campaign gains further momentum, activity was seen accelerating even more in the second half of the year.
The economy would get back to pre-crisis levels of activity from the start of next year – earlier than previously expected – as a burst of consumer spending and business investment fuelled the recovery.
The central bank said households would start tapping into the extra savings built up under coronavirus restrictions that forced many retail outlets to close for months and which were expected to peak at 7% of gross domestic product by year-end.
Business investment was already seen topping out at record levels this year, as firms profit margins improved while companies benefited from new tax breaks under the governments 100 billion euro recovery plan.
(Reporting by Leigh Thomas; Editing by Alex Richardson)