France's central bank, Banque de France (BdF), on Friday forecast French GDP to grow "at least by 1. 4 percent" in 2016 on the back on bolstered consumer expenditure and investments.
"Domestic demand will significantly gain momentum with an increase of household consumption. We also expect sustained recovery in business investment," the BdF said in a statement. In its biannual macroeconomic projections, the BdF attributed the country's positive economic performance to a recovery in euro area activity and "the highly accommodative" monetary policy of the European Central Bank.
The bank said household consumption would grow by 1.9 percent in 2016, up 4 percentage points from a year earlier while corporate investment would rise by 3.4 percent compared to the 2.9 percent reported in 2015.
BdF forecast the budget deficit would be at 3.3 percent of GDP, noting that further efforts to squeeze public spending would be needed to honor fiscal commitment.
Low energy costs would continue to pull down consumer prices in France whose inflation rate would rise only 0.2 percent this year before growing by 1.1 percent in 2017 and 1.4 percent in 2018, it estimated.
According to the central bank's outlook, growth of the eurozone' s second largest economy would stand at 1.5 percent next year and 1.6 percent in 2018.
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