Economic activity should register a slight increase of 0.1% in the third quarter against a backdrop of slowing inflation, the Banque de France said on Monday. Although resilient between July and September, activity should mark a clear slowdown after the unexpected 0.5% rebound in gross domestic product (GDP) observed in the second quarter. “The economic situation after the summer is less favorable than the one we had just before the summer,” declared Olivier Garnier, general director of statistics, studies and international affairs at the Bank of France, when presenting the institution’s new monthly economic study.
In September, the central bank said it expected a 0.1% to 0.2% increase in GDP in the third quarter. From July to September, the activity will benefit from the end of disturbances in the chains of approvision, from the positive effect of the redémarrage of nucléaires réacteurs et de la résistance de services comme l’hébergement ou la restoration, selon la Banque de France.
Price cuts are gaining ground
As for prices, the trend continues to be one of calmness thanks to the drop in raw material prices and the slightest supply difficulties. Thus, 7% of manufacturers declared that they had increased their sales prices in September, compared to 29% a year earlier; 6% even lowered them, according to this survey carried out among some 8,500 business leaders between September 27 and October 4. In the agri-food sector, a sector where a Government bill seeks to advance trade negotiations in the hope of accelerating price drops in stores, as many business owners (7%) have reduced as their prices increased ( compared to 2% and 43% respectively a year ago).
In detail, only in the month of September did activity remain almost stable in the industry. Progress was made in finishing works on the building and services, the latter benefiting especially from the Rugby World Cup effect and mild weather. By October, activity should recover slightly in industry, while progress should continue in services and building finishing works. Structural works would fall sharply in a context of high rates.
Hiring difficulties, although decreasing, remain high (48% in September compared to 50% in August). For 2023 as a whole, the Banque de France expects growth of 0.9%, somewhat less than expected by the government (1%).
Source: BFM TV
