PARIS - France’s economy is expected to eke out growth in the second quarter after stalling in the first, as higher consumer spending helps offset the drag from interest rates, official statistics agency National Institute of Statistics and Economic Studies (Insee) said on March 14.

The eurozone’s second-biggest economy is now set to record zero growth in the first quarter, compared with a previous estimate in February of 0.2 per cent growth, Insee said in its economic outlook.

The downward revision reflects lower industrial production resulting from refinery halts and supply chain problems in the automotive sector, it said.

It then expects the economy to grow 0.3 per cent in the second quarter against its February estimate of 0.2 per cent, leaving the economy with a growth momentum of only 0.5 per cent by mid-year.

That means France would need quarterly growth of 0.7 per cent in both the third and fourth quarters to have any hope of meeting the government’s recently revised 1 per cent growth forecast for the full year.

In February, Paris lowered its 2024 growth forecast to 1 per cent from a prior 1.4 per cent and announced €10 billion (S$14.5 billion) in emergency budget cuts to keep its deficit-reduction plans on track.

It remains under pressure to find extra savings.

The Bank of France said in its quarterly outlook on March 12 that the economy was set to grow 0.8 per cent in 2024, revising down its December forecast of 0.9 per cent.

Insee said on March 14 that inflation would keep easing over the first half of 2024, from 2.9 per cent in February to 2.6 per cent in June. REUTERS