France Business Confidence May 2008
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Growth in the euro area's second-largest economy has been slowing recently as inflation hurts consumer spending at the same time as exporters feel the pinch of slowing orders from the U.S., a euro worth around $1.55 and record oil prices.
A sub-index of how executives see the economic outlook fell to minus 15 from minus 9, while a gauge of orders dropped to minus 11 from minus 4 and a measure of foreign orders declined to minus 7 from 3.
The 18 percent gain in the euro against the dollar over the past year will continue to put pressure on exports as rising inflation weighs on consumer demand in local markets. Consumer prices rose 3.4 percent in France this month from a year ago. Higher energy costs are pushing up inflation, with the price of oil reaching a record $135.09 a barrel on May 22.
The French government expects growth of between 1.7 percent and 2 percent this year, compared with 1.9 percent last year.
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