French central bank raises growth outlook as economy booms bewafanews

 PARIS (Reuters) - France's economy is recovering faster than expected this year as the COVID-19 crisis eases, the central bank said on Monday, raising its growth outlook for this year.

The euro area's second-largest economy is expected to grow 6.3% this year, the Bank of France said in its quarterly outlook, revising its estimate from 5.8% previously expected in June.

The country's vaccination campaign picked up pace in the second quarter and the economy has beaten most expectations in recent months after coronavirus restrictions were eased, allowing most businesses to return to work.

The central bank's revision makes its outlook more optimistic than that of the government, which is building its 2022 budget on the assumption that the economy will grow 6% this year.

The faster-than-expected bounce meant that the resulting growth would be slightly lower next year as a more recovery focused in 2021.

The central bank forecasts the economy to grow by 3.7% in 2022 and 1.9% in 2023, down 4.1% and 2.1%, respectively, from previous forecasts.

Drawing on the findings of its monthly survey of 8,500 businesses, the central bank projected that the economy was operating at only half a percentage point from pre-crisis levels in September and would return to normal levels by the end of the year for the first time. Ever since the pandemic broke out.

On a quarterly basis, it is estimated that the economy will grow close to 2.5% in the three months to the end of September, the central bank estimates. This would be more than double the 1.1% growth seen in the second quarter.

With the economy booming, half of companies were reporting staffing difficulties, while more than half of industrial companies and 61 percent of construction firms were experiencing supply-chain troubles.

Against that background, inflation was expected to average 1.8% this year before falling back to 1.4% next year and 1.3% in 2023. Despite the strong rebound, unemployment was seen to be largely stagnant between now and 2023 at 8.1%-8.2%.

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Created by MOHAMMAD SHOAIB.