The growth of the French economy will experience a sharp drop in speed in 2023, still affected by the energy crisis and inflation, before rebounding in the next two years, the Banque de France projected on Saturday.
Gross domestic product (GDP) growth will slow sharply, from 2.6% in 2022 to 0.3% in 2023, according to the “most likely” scenario retained for the French central bank’s three-year macroeconomic projections .
This decline will be followed by a rebound to 1.2% in 2024, less than the +1.8% previously forecast, because “winter 2023-24 could still be a bit tricky in the context of the energy crisis,” according to its director directorOlivier Garnier. The recovery will continue in 2025 with expected growth of 1.8%.
However, these forecasts remain subject to high uncertainty due to the high volatility of energy prices, geopolitical tensions, especially the war in Ukraine, and the evolution of the health situation in China with Covid-19, he stressed. the Bank of France.
That is why it publishes a range of GDP evolution for next year between -0.3% and +0.8%.
“We cannot rule out a recession”
In any case, the institution is more pessimistic than the Government, which forecasts growth of 2.7% for this year and 1% in 2023.
If they calm down a bit, oil and gas prices will stay high and continue to fuel inflation, as will food prices, which have skyrocketed as well.
The price increase should rise to 7.3% by the end of 2022 and should peak in the first half of 2023 (6% in the year as in 2022 on annual average) before falling back to 4% at the end of 2023. next year and back to around 2% by the end of 2024-25.
To measure inflation, the Banque de France uses the Harmonized Consumer Price Index (HICP), which allows comparison between European countries and gives more importance to energy prices than the consumer price index used by INSEE and the French government.
Source: BFM TV
