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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 per cent per year in 2015-2025, with the most likely scenario at 1.5 per cent.
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 per cent 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 economy will accelerate from estimated growth of only 0.1 per cent this year and to 1.2 per cent in 2014.