The Banque de France now forecasts for the year 2023 a growth of the French economy of “at least” 0.6%, while inflation is “really” slowing down, said its governor, François Villeroy de Galhau, on Friday.
“Growth during the year 2023 (…) will be at least equal to what we forecast last March, that is, at least 0.6%,” said François Villeroy de Galhau on Radio Classique, specifying that Banque de France update their projections to 2025 on June 20.
In the second quarter, the French economy should continue to resist modestly, with an increase in gross domestic product (GDP) of 0.1% compared to the previous three months, according to the monthly economic survey published by the institution on Thursday. On the price front, it reported an improvement, although inflation remains high. “The good news is that there is a change in the trend in the price increases of companies,” explained François Villeroy de Galhau.
“Slowdown Inflation”
In industry, 10% of business leaders raised their prices in May from 50% a year earlier, he said, and “we see the same trend in services.” “This is what reinforces our analysis: that we are in the process of passing the peak of inflation in France and in the euro zone,” she continued. “There is definitely a slowdown in inflation.”
By carrying out an aggressive monetary tightening from the summer of 2022 to curb rising prices, the European Central Bank (ECB) intends to return to the 2% target by 2025. According to an initial estimate by the National Statistics Institute (INSEE) , inflation in May benefited from a strong energy slowdown that was at the origin of the inflation shock but has since been supplanted by food. Thus, prices continued to rise throughout a year, 5.1%, but with less intensity than in previous months (5.9% in April and 6% at the beginning of the year).
Source: BFM TV
