French CB Trims Growth Outlook

France’s economy is set to grow 1.6% annually through to 2020 as unemployment steadily falls, the central bank forecast on Friday, trimming slightly its previous growth outlook.

The Bank of France had previously forecast growth of 1.8% in 2018 and 1.7% in 2019, but said the first half of this year was weaker than anticipated and foreign demand was now expected to be softer than previously expected next year, Reuters reported.

With its updated outlook, the central bank is more pessimistic than the government, which is basing its 2018 budget on the assumption the economy will grow 1.7% this year and next year.

The outlook also indicated France is likely to lag the broader eurozone after the European Central Bank forecast on Thursday that the bloc would grow 2% this year, 1.8% in 2019 and 1.7% in 2020.

“France is still lagging on growth because France is still lagging on reforms,” Bank of France Governor Francois Villeroy de Galhau told Europe 1 radio. Villeroy added that while France had recently carried out important reforms, especially on training, there remained a lot to do to rein in spending.

In the central bank’s outlook, unemployment was seen gradually falling from 9.1% in the second quarter to 8.3% by the end of 2020, the lowest level since the end of 2008, as the global financial crisis was breaking out.

As unemployment fell and households’ purchasing power picked up, consumer spending was expected to accelerate over the coming years, helping to offset slower business investment.

Meanwhile, inflation was expected to peak this year at 2.1% following higher energy prices, before easing back to 1.7% in 2019 and 1.8% in 2020.

When the EU’s standardized regulation for cryptocurrency and ICO is still unclear, France takes the initiative by introducing the approved ICO regulation in the country. The announcement was made by the Minister of Economy and Finance Bruno Le Maire in his official Twitter account just a couple of days ago.

The new regulation stated that the AMF (Authorite des Marches Financiers), French financial authority will be allowed to approve and issue consents to companies that plan to conduct ICO to raise capital.