AFP, Paris :
Growth paths in top eurozone economies Germany and France are headed in different directions, central bank data showed Friday, raising the prospect of tension between the two powerhouses.
France’s central bank Friday trimmed its growth forecasts for 2016 to 2018 citing a worsening of the global economy and Brexit, while Germany’s Bundesbank lifted its outlook.
The diverging projections in the eurozone’s two top economies came a day after the European Central Bank extended measures to underpin the bloc’s economy as it grapples with political uncertainties.
Germany and neighbouring France both hold crunch elections in 2017.
The EU must also negotiate with Britain on its looming exit, as well as navigate Italy’s future after the resignation of Italian Prime Minister Matteo Renzi.
Revising its GDP growth forecasts down, the Bank of France said in a statement that it was “mainly due to the deterioration in the international environment”.
“The projection is thus particularly affected by less favourable foreign demand prospects.., notably as a result of the impact of Brexit on the UK economy and of its dissemination to the euro area economies.”
The French central bank revised its 2016 and 2017 growth forecast down to 1.3 percent, having previously expected growth of 1.4 percent this year and 1.5 percent next year.
It also predicted growth of 1.4 percent in 2018, down from its previous figure of 1.6 percent.
ECB board member Benoit Coeure, a Frenchman, warned presidential contenders in next year’s elections not to expect any financial wriggle room.
Candidates should not expect to find on winning “a kitty or budgetary margins of maneouvre that they’re going to be able to spend”, Coeure said on Europe 1 radio.
“These margins of maneouvre don’t exist and there’s a risk of a rise in interest rates,” he said.
And he pointed out that growth in France would be weaker than in the rest of the eurozone. “France is lagging behind in terms of growth,” he added.
Growth paths in top eurozone economies Germany and France are headed in different directions, central bank data showed Friday, raising the prospect of tension between the two powerhouses.
France’s central bank Friday trimmed its growth forecasts for 2016 to 2018 citing a worsening of the global economy and Brexit, while Germany’s Bundesbank lifted its outlook.
The diverging projections in the eurozone’s two top economies came a day after the European Central Bank extended measures to underpin the bloc’s economy as it grapples with political uncertainties.
Germany and neighbouring France both hold crunch elections in 2017.
The EU must also negotiate with Britain on its looming exit, as well as navigate Italy’s future after the resignation of Italian Prime Minister Matteo Renzi.
Revising its GDP growth forecasts down, the Bank of France said in a statement that it was “mainly due to the deterioration in the international environment”.
“The projection is thus particularly affected by less favourable foreign demand prospects.., notably as a result of the impact of Brexit on the UK economy and of its dissemination to the euro area economies.”
The French central bank revised its 2016 and 2017 growth forecast down to 1.3 percent, having previously expected growth of 1.4 percent this year and 1.5 percent next year.
It also predicted growth of 1.4 percent in 2018, down from its previous figure of 1.6 percent.
ECB board member Benoit Coeure, a Frenchman, warned presidential contenders in next year’s elections not to expect any financial wriggle room.
Candidates should not expect to find on winning “a kitty or budgetary margins of maneouvre that they’re going to be able to spend”, Coeure said on Europe 1 radio.
“These margins of maneouvre don’t exist and there’s a risk of a rise in interest rates,” he said.
And he pointed out that growth in France would be weaker than in the rest of the eurozone. “France is lagging behind in terms of growth,” he added.
