(MENAFN- The Peninsula) Paris: France's central bank trimmed its growth forecasts for 2016 and 2017 on Friday, citing a deterioration in the global economy and Britain's decision to leave the European Union.
The Bank of France revised its 2016 and 2017 growth forecast down to 1.3 percent, having previously expected growth of 1.4 percent this year and 1.5 percent next year.
It also predicted growth of 1.4 percent in 2018, down from its previous figure of 1.6 percent."In 2017 and 2018, the downward revision of our GDP growth projection... is mainly due to the deterioration in the international environment," it said in a statement.
"The projection is thus particularly affected by less favourable foreign demand prospects.., notably as a result of the impact of Brexit on the UK economy and of its dissemination to the euro area economies."
France's national statistics agency Insee in October also cut back its outlook for annual growth this year to 1.3 percent from 1.6 percent.
The European Commission forecasts 1.3-percent growth in GDP in 2016 and 1.4 percent next year, while the OECD is betting on 1.2 percent and 1.3 percent respectively. Britain voted on June 23 to leave the EU, and Prime Minister Theresa May has promised to trigger the two-year divorce process at the end of March. European Central Bank chief Mario Draghi (pictured) on Monday highlighted the risks which the referendum result poses for European economies.
"Looking at the recent events, it is quite clear that geopolitical uncertainty has become the major source of uncertainty for the months to come," he told EU parliamentarians.
The Bank of France also said the French economy is no longer expected to benefit fully from the positive effects of the fall in oil prices, which have led to significant gains in purchasing power for households over the past two years.
"Since the first quarter of 2016, the price of oil has rebounded and it should continue to recover gradually until 2019," said the bank, which forecast a "deceleration of domestic demand" after peaking in 2016.
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