PARIS (Reuters) - France is unlikely to return to pre-crisis growth levels any time soon, national statistics office INSEE said on Friday in an estimate of the potential growth rate for 2015-2025.
The euro zone's second-largest economy, which fell into a shallow recession at the beginning of the year, grew on average by 2.2 percent per year in 1994-2007, before the financial crisis.
But according to INSEE, potential growth, a complex estimate based on underlying productivity and utilization of workforce and capital, will range between 1.2 and 1.9 percent per year in 2015-2025, with the most likely scenario at 1.5 percent.
Potential growth is important for medium-term policy planning and estimates of other macro-economic indicators.
In its multi-annual budget planning that goes through the end of its mandate in 2017, the government has forecast that the economy will grow 2 percent each year between 2015 and 2017, which most economists see as unlikely.
The government is banking on a strong rebound in coming years, forecasting that the 2 trillion euro economy will accelerate from estimated growth of only 0.1 percent this year and to 1.2 percent in 2014.
Weak demand and record unemployment pushed the economy into a recession at the start of the year, though some recent economic data have offered signs a nascent recovery is taking hold.
Faltering growth has forced France to acknowledge that its public deficit will be bigger than planned this year. The European Commission has given France two extra years to meet an EU-deficit target of 3 percent on account of the deteriorated outlook.
(Reporting by Yann Le Guernigou and Ingrid Melander)
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