The French economy will grow by just 0.2 percent in the second quarter of 2014, the central bank forecast on Monday, as company morale faltered despite a pro-business push by the Socialist government seeking to tame unemployment and cut the deficit, reports Reuters.
The Bank of France estimated that the euro zone's second-biggest economy would also grow 0.2 percent in the first three months of the year, half the euro zone average according to a Reuters poll of economists. Germany is forecast to grow 0.7 percent.
Economists polled by Reuters expect on average that the INSEE national statistics agency will report first quarter growth of 0.2 percent for France when it publishes GDP data for the period on May 15.
President Francois Hollande has made cutting unemployment, at 10.2 percent, his priority, but has made little headway, driving his approval ratings to a record low of 18 percent, according to an OpinionWay poll released on Sunday.
He hopes to spur economic recovery by phasing out 30 billion euros ($41.3 billion) in payroll tax on companies over the next year. Although Hollande has billed the move as a major shift towards more business-friendly policies, companies' outlook remained tepid and lagged behind morale in other major euro zone countries.
The central bank gave its estimate in its monthly business climate survey for April which showed morale in the industrial sector slipped to 98 from 99 in March, pulling back from the index's long-term average of 100.
Read more of this report from Reuters.