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French businesses boost investment plans: INSEE

[PARIS] France's manufacturing businesses plan to boost investment by 7 per cent this year, a survey showed on Wednesday, over double the increase planned three months ago and a sign of life in a sector that has yet to take a full part in France's economic recovery.

The result of the survey conducted in April by the INSEE statistics office compared with 3 per cent in a previous quarterly survey.

INSEE added that while for the first half of 2015 the number of industrialists planning an increase in investment was about equal to the number planning a cut, for the second half, there was a 10 per cent bias towards an increase.

Flat business investment has been a drag on the improving outlook for the euro zone's second-largest economy at a time when consumer spending and exports are picking up.

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In April the government announced plans to offer bigger tax rebates on investments in a bid to boost business activity and help the slow revival of France's economy.

Finance Minister Michel Sapin welcomed the INSEE news; "This is a long-term driver of the recovery that is firing up," he said in a statement claiming a victory for the government's policies.

The businesses surveyed reported a 2 per cent increase in investment for 2014, unchanged from the previous survey.

Bank of France Governor Christian Noyer said last week that economic growth, which the government expects to hit one per cent this year, could rise above 1.5 per cent in 2016 and so start to create employment if supported by economic reforms.