The Bank of France today raised its forecast for growth of the French economy in the second quarter to 0.7% from 0.6%.
On this basis, even if the economy did not grow, or contract, during the rest of the year, growth at the end of 2006 would be 1.6% - the so-called assured growth figure - the bank said.
The French central bank also reported that its index of French business confidence had risen to 111 in May from 106 in April. It reported business leaders as saying that industrial activity had rallied in May.
Meanwhile, French inflation was 2.1% in May on a 12-month basis after 1.7% in April owing mainly to high energy prices, the statistics institute Insee said today. In May, consumer prices rose by 0.4% from the April figure.
Underlying inflation, excluding the prices of energy products and of volatile prices such as food prices, was steady in May on a monthly basis after an increase of 0.2% in April, and over 12 months it fell to 1.1% from 1.2% in April. In May, as in April, most of the increase in overall inflation was driven by a rise in the cost of energy.
Energy prices rose by 2% in May on a monthly basis and by 12.9% over 12 months.
Prices for service also rose. In particular, the price of holiday tourism surged by 11% in the month as the summer holiday season in Europe began.
