The French economy was set to grow by 0.2 percent this year on expected rebound in manufacturing output, according to official figures released late on Thursday.

In its quarterly economic outlook, the statistics bureau, INSEE forecasted growth of Europe's main powerhouse to stagnate over the third quarter due an expected slowdown "in the energy and transport equipment sector ... most notably due to the after-effects of the previous quarter."

Mired into recession at the start of the year, France will accelerate its GDP by 0.2 percent to reach its pre-crisis performance, compared to previous negative outlook set at minus 0.1 percent.

With the domestic business climate improving and all the industrial sectors setting to gain momentum, the country's total manufacturing output would increase by 0.4 percent after it had fallen by 2.8 percent in 2012, the report said.

Corporate investment would return to growth in the final quarter of the year while households' expenditure was seen falling by 0.3 percent this year.

In its report, the INSEE also forecast that the unemployment rate would stabilize by the end of year at 11 due to "the sharp rise in the number of subsidized jobs in the non-market sector."

The ruling Socialists have promised to overturn the unemployment trend by year-end betting on expected improvement in economic activities and thousands of state-sponsored jobs for young and poorly-skilled jobseekers.

"The pledge to reverse the trend, which some people only recently considered to be impossible, now seems more than ever to be within reach," Finance Minister Pierre Moscovici said in a statement.

Moscovici said if the recovery "confirmed in the coming quarters, our 2014 growth forecast of 0.9 percent could be exceeded." Endi

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