PARIS (Reuters) – The French economy could experience “very slight” growth in the fourth quarter, said the Banque de France on Wednesday, which noted both good resistance in business activity and an easing of inflationary pressures.
The growth forecast for the fourth quarter is however surrounded by a “very strong uncertainty”, due to the international context but also to the vagaries linked to the weather and to energy supplies, specified Olivier Garnier, director general of statistics, studies and international banking.
Growth in France’s gross domestic product (GDP) slowed to 0.2% in the third quarter according to the first estimate published at the end of October by INSEE, after 0.5% over the previous three months.
In its monthly economic update, which is based on a survey of around 8,500 companies between October 27 and November 4, the Banque de France explains that “activity continues to resist overall” and that companies anticipate a continuation of this trend in November.
It also evokes a further reduction in supply difficulties in industry, an attenuation of recruitment difficulties or even a slowdown in the rise in prices of finished products.
“Companies tell us that there are always significant increases, but they are a little less significant than what we experienced in the first part of the year,” said Olivier Garnier. “It’s going in the right direction but it doesn’t yet mean we’re going to see a turning point in consumer price inflation.”
The BdF survey also highlights a deterioration in the cash position of companies in industry and, to a lesser degree, in services.
In industry in particular, “working capital requirements are greater and inventories, with price increases, are more expensive”, detailed Olivier Garnier.
(Report Leigh Thomas and Marc Angrand, edited by Jean-Stéphane Brosse)
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