PARIS (Reuters) - The French government’s forecast for 1 percent economic growth in 2015 is realistic, but achieving it will depend on low interest rates, stability in Ukraine, a healthy U.S. economy and other factors, President Francois Hollande said on Thursday.
The Socialist government revised down its growth forecast for 2015 from a previous 1.7 percent, as it struggles to lower unemployment, which is stuck above 10 percent, and spur private sector investment.
“To target 1 percent growth in 2015 appears realistic,” Hollande said after meeting Finnish Prime Minister Alexander Stubb. “A lot will depend on several parameters.”
“The first is what we do in Europe (...) The second parameter is the calming down that can happen near our borders because there can be serious consequences if the conflict in Ukraine continues,” he added.
As other factors supporting growth, he listed a weaker euro against the dollar, low interest rates, the European Central Bank’s injection of liquidity into the financial system, as well as healthy growth in the United States and emerging economies.
However, a public spending watchdog has called the latest growth forecast “optimistic” and said it depended on a swift and durable recovery of the French economy which current indicators did not suggest was imminent.
France has blamed a high level of the euro against the dollar and a lack of investment by the German government in its domestic economy for limiting economic growth in the euro zone, while it seeks more leeway on its deficit-cutting targets.
On Wednesday, France laid down the gauntlet to EU partners with a 2015 budget that envisaged bringing its borrowing back to within EU limits two years later than promised — a retreat it blamed on a fragile economy.
Reporting by Julien Ponthus; Writing by Nick Vinocur; Editing by Crispian Balmer