Gross domestic product (GDP) growth in France is expected to reach 0.3% in the third quarter, compared with the previous quarter, according to a Banque de France forecast released on Thursday. Despite a very high level of uncertainty linked in particular to the energy crisis, “activity as a whole continues to hold up”, according to the results of the latest economic survey carried out by the central bank. The Insee, for its part, forecast on Wednesday a slightly lower growth of 0.2% in the third quarter.
“Activity was a little better than expected during the month of August,” Banque de France CEO Olivier Garnier said during a press briefing. Activity increased in market, leisure and restaurant services, as well as consultancy and programming, but rental of equipment and vehicles fell due to supply problems. In construction, the activity is “practically stable” and is advancing slightly in industry, where it shows contrasting trends depending on the sector.
Thus, activity increased in computer and electronic products, as well as in clothing, but decreased in the chemical, pharmaceutical, wood and paper industries. The food industry is also making slight progress. Business leaders interviewed by the Banque de France “do not mention at this stage any significant impact of bad weather conditions”, namely the drought, “on production during the month of August” for this sector.
supply difficulties
For the month of September, “business leaders expect an increase in activity in most sectors,” according to the note. The situation of the order book is stable in the industry and “deteriorates in construction”, remaining above its fifteen-year average. Supply difficulties are diminishing but continue to worry one out of every two companies in industry (51%) and somewhat less in construction (43%). “This drop corresponds to what we see globally,” comments Olivier Garnier.
On the other hand, regarding the difficulties of hiring, the director of the Banque de France does not observe “any significant fall”. Finally, inflationary pressure is easing, but “the drop we see in producer prices will take time to show up in consumer prices,” believes Olivier Garnier. On September 15, the Banque de France will review its growth forecast for all of 2022, as well as for 2023 and 2024.
Source: BFM TV
