2023-12-12 02:44:14
The French economy should barely recover at the end of the year. Activity should in fact grow modestly by 0.1% in the fourth quarter, the Banque de France indicated on Monday. Good news all the same: the country will avoid recession following a third quarter in the red.
This very slight increase in gross domestic product (GDP) compared to the previous quarter (at -0.1%) would occur in a context of “price normalization” and would therefore allow France to escape recession, defined as two consecutive quarters of decline.
Services save the rise in GDP
“Activity will hold up in the fourth quarter thanks to services,” commented Olivier Garnier, general director of statistics, studies and international affairs at the Banque de France, presenting the institution’s new monthly economic survey. The floods and storms that hit France in November had a “limited” impact on economic activity, he added.
According to some 8,500 business leaders surveyed between November 28 and December 5, activity increased in services in November and is expected to continue to grow in December. Management consulting for businesses, information services and automobile repairs – more in demand following the bad weather – performed well last month, unlike and temporary work services. Then, companies are counting on the fallout from the end-of-year holidays, particularly in the catering sector.
Less than 1% growth in 2023 and 2024
In industry, activity should contract in December, following stagnation in November, the dynamism of aeronautics or pharmaceuticals having been offset by the decline in automobiles or IT products. In construction, the structural work should continue to suffer in December, as in November, while the secondary work should stabilize following a slight increase. A bad omen for activity in the coming months, companies see a continued deterioration in their order books in industry and construction.
On the price front, however, the trend is towards “normalization” in industry and construction, with more companies having lowered their production prices than the proportion of those having increased them, underlined Olivier Garnier.
The Banque de France forecasts growth of 0.9% for 2023 and 2024 (compared to 1% and 1.4% anticipated by the government). On December 18, it will present its new macroeconomic projections for the period 2023-2025.
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