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Bank Of France Revises Up Q1 Growth Estimate To 0.4%

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The Bank of France raised its first quarter growth estimate for the French economy back to 0.4 percent on Thursday, citing growth in industrial production and stronger foreign demand.

In March, the bank had lowered the forecast to 0.3 percent from 0.4 percent. In the fourth quarter, the French economy grew 0.1 percent from the previous three months.

The European Commission forecast that the French economy will expand 1 percent in 2015 and by 1.8 percent the next year. The French economy grew 0.4 percent in 2014, the same rate as in 2013.

The government has also forecast 1 percent growth for this year.

Survey results from the bank revealed that business sentiment index for the manufacturing sector climbed to 97 in March from 96 in February. Economists had expected a score of 98.

The confidence indicator for the services sector remained steady at 93, while the index for the construction sector rose to 91 from 90.

The bank's survey also found that industrial production grew in March and deliveries increased, as activity intensified in the non-automobile transport equipment, chemicals, agri-food and electrical equipment sectors.

Though order books returned to satisfactory levels, led by stronger demand from overseas, staff levels declined slightly. Inflationary pressures continued to ease and cash positions strengthened.

Looking ahead, business leaders expect industrial production to increase further in April, the survey said.

In the service sector, activity increased in March, driven by temporary work, transport and consulting sectors. Staff levels and cash positions grew, while prices continued to decline. Businesses expect service sector activity to continue rising in April, the survey said.

Meanwhile, business leaders in the construction sector expect a decline in activity in April, as orders books remained negative in March despite slight improvement. Staff levels declined.

The latest Purchasing Managers' survey showed that private sector growth slowed slightly in March, with the service sector expanding for a second straight month, while the decline in manufacturing activity was less severe.

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