The Bank of France confirmed on Thursday its growth forecast of 0.3% of gross domestic product (GDP) in the third quarter in a monthly survey that reflects a climate of uncertainty, although carried out before the resignation of Sébastien Lecornu.
The independent institution prepares a monthly diagnosis of the French economy based on data collected, in particular, from business leaders.
The survey, carried out between September 26 and October 3, a few days before the Prime Minister’s resignation, indicates that uncertainty remained stable at a high level in September, after a sharp increase the previous month.
The growth in activity, order books and price developments throughout this month are in line with the trends previously observed and confirm the Banque de France in its growth forecast for the third quarter, detailed chief economist Olivier Garnier, during an online press conference.
However, situations vary from one sector to another.
Positive signs
In construction, activity sustained for three months decreased in September. The advertising sector is also in decline: “Often the first thing we reduce are expenses (…), companies also tell us that this may be related to the national political situation that leads some clients to postpone their projects,” analyzes Olivier Garnier.
There are some positive signs in the services market, particularly in accommodation, which is growing thanks to foreign tourism.
Aeronautics maintains favorable prospects with very complete order books, unlike textiles and clothing, chemicals, rubber and plastics, explained Olivier Garnier.
The uncertainty indicator, which does not include the latest political developments, is at a higher level than when the dissolution of the National Assembly and the July 2024 legislative elections were announced.
Because in recent months, fears from the industrial sector about the new American customs tariffs have been added to the questions about the French political situation.
But this uncertainty should not alter the Bank of France’s 0.7% annual growth forecast, Olivier Garnier estimated, and barring “a big upward or downward surprise in the fourth quarter”, this forecast is “largely confirmed” at this point in the year.
Source: BFM TV
