Rising French confidence lets Sarkozy raise latest forecast for growth
Published 24/03/2012 | 05:00
FRENCH business confidence jumped more than economists forecast this month, the latest sign of an economic rebound that allowed President Nicolas Sarkozy to lift his growth forecast in the midst of an election fight.
Sentiment among factory executives rose to 96 this month from 93 in February, Insee, the national statistics office in Paris, said yesterday.
On Thursday, Insee raised its 2012 growth estimate to 0.7pc from 0.5pc previously, but cut its 2013 outlook to 1.75pc growth from 2pc.
Economists hadn't expected the pick-up in business sentiment this month to be as strong, and it's the first time in over a year that the gauge has risen in two consecutive months.
The improvement signals a recovery that Mr Sarkozy is trumpeting at the end of a five-year term dominated by a financial crisis that drove French joblessness to a 12-year high.
"The confidence rebound is really quite strong," said Michel Martinez, an economist at Societe Generale in Paris. "Executives are signalling that the economy touched bottom in the fourth quarter and is now returning to normal."
Mr Sarkozy is vaunting his credentials as a crisis fighter as the French election enters its final six-week stretch.
Still, the results may not spur enough job creation in time to get noticed by voters, Mr Martinez said.
"The growth will be there but it will be moderate. It won't be enough to dent unemployment."
Insee predicts that French companies will cut 49,000 jobs in the first half of 2012 after slashing 54,000 in the six months to December. The unemployment rate in France will climb to 10.1pc in June from 9.8pc in December, the statistics office.
Mr Sarkozy is currently trailing his closest rival, socialist Francois Hollande, in opinion polls. (Bloomberg)