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Bank of France cuts growth forecast French growth forecast lowered while Germany's is raised
(31 minutes later)
The Bank of France has cut its forecast for the French economy. There has been mixed news on the outlook for the eurozone's biggest economies.
It now expects the economy to contract by 0.1% between April and June this year, having predicted that there would be zero growth less than a month ago. The Bank of France expects the French economy to contract by 0.1% between April and June this year, having predicted that there would be zero growth less than a month ago.
But the German central bank has increased its forecast for German growth this year from 0.6% to 1%.
German growth has kept the eurozone out of recession this year.
There was zero growth in the French economy in the first three months of the year, following growth of just 0.1% in the previous quarter.There was zero growth in the French economy in the first three months of the year, following growth of just 0.1% in the previous quarter.
The cut is the latest sign of the lack of growth in the eurozone, which is struggling with the debt crisis.
Earlier this week, the latest set of official figures confirmed the eurozone economy achieved zero growth in the first three months of 2012.Earlier this week, the latest set of official figures confirmed the eurozone economy achieved zero growth in the first three months of 2012.
Declining activityDeclining activity
The cut in the French growth forecast came in the Bank of France's Survey on Industry and Services for May.The cut in the French growth forecast came in the Bank of France's Survey on Industry and Services for May.
It found that: "Industrial activity declined in May, in particular in the automotive and metalworking sectors."It found that: "Industrial activity declined in May, in particular in the automotive and metalworking sectors."
In the services sector: "activity marked an overall decline, especially in the temporary work, transport and hotel-catering sectors".In the services sector: "activity marked an overall decline, especially in the temporary work, transport and hotel-catering sectors".
On Thursday, official figures showed that French unemployment had hit 10% in the first quarter of 2012.On Thursday, official figures showed that French unemployment had hit 10% in the first quarter of 2012.
German growthGerman growth
But there was better news for Europe's biggest economy: Germany. While there was better news from Germany for the current year, the Bundesbank also cut its 2013 forecast from 1.8% to 1.6%.
Its central bank, the Bundesbank, has increased its forecast for German growth this year from 0.6% to 1%.
But it has cut its 2013 forecast from 1.8% to 1.6%.
Latest figures from Germany showed that its exports had dropped 1.7% in April compared with the previous month.Latest figures from Germany showed that its exports had dropped 1.7% in April compared with the previous month.
The decline followed three consecutive months of gains.The decline followed three consecutive months of gains.
But exports grew 3.4% compared with the same month last year, led by a 10.3% increase in exports to countries outside the European Union.But exports grew 3.4% compared with the same month last year, led by a 10.3% increase in exports to countries outside the European Union.
Germany's imports fell 4.8% compared with the previous month.Germany's imports fell 4.8% compared with the previous month.
"The recent escalation of the debt crisis is leaving its mark. Orders are also declining because of weaker global demand," said Juergen Michels from Citigroup."The recent escalation of the debt crisis is leaving its mark. Orders are also declining because of weaker global demand," said Juergen Michels from Citigroup.
"Exports are likely to fall further in the months ahead because of this, but we won't see a complete collapse.""Exports are likely to fall further in the months ahead because of this, but we won't see a complete collapse."
Italian declineItalian decline
Italy's industrial production declined by more than expected in April.Italy's industrial production declined by more than expected in April.
Data agency Istat said that production had fallen 1.9% compared with the previous month.Data agency Istat said that production had fallen 1.9% compared with the previous month.
Compared with the same month last year, industrial production was down 9.2%, which was its worst annualised drop since November 2009.Compared with the same month last year, industrial production was down 9.2%, which was its worst annualised drop since November 2009.