FRENCH INSTITUTE PESSIMISTIC ON 1987 GROWTH
French gross domestic product will grow
by only 1.5 pct in real terms this year, compared with the
government's forecast of two to 2.5 pct growth, the private
Institut des Previsions Economiques et Financieres pour le
Developpement des Entreprises (IPECODE) said.
    However, it expects growth to recover next year to the 1986
level of two pct.
    IPECODE said demand and production would develop in
parallel this year, in contrast to last year when production
was unable to keep pace with the strong rise in domestic
demand, unleashing higher import demand.
    Claims on the International Monetary Fund (IMF) rose by 298
mln francs to 19.61 billion francs, due to net withdrawals in
francs by member nations, and an increase in reserves of
Special Drawing Rights (SDRs) due mainly to the repayment of
French debts.
    Its deficit with the European Monetary Cooperation Fund
(FECOM) remained unchanged in February at 33.90 billion francs.
    French household consumption, which rose by 3.1 pct last
year, is likely to grow by just 1.1 pct this year and 1.5 pct
in 1988, it added.
    Industrial investment is expected to rise by 4.3 pct this
year and 5.5 pct in 1988, down from 6.5 pct in 1986.
    Inflation, which was running at 2.1 pct at the end of 1986,
is likely to rise to 2.9 pct at the end of this year, IPECODE
said, while the government has forecast 2.5 pct.
    However, the institute said inflation would fall back to
2.5 pct at the end of 1988, "provided that real wage costs
remain within the framework of productivity rises."
 REUTER
