Economic activity in France should grow modestly by 0.1% in the fourth quarter thanks to the services sector, the Bank of France said on Monday, the country thus avoiding recession after a third quarter in the red.
This slight increase in gross domestic product (GDP) compared to the previous quarter (-0.1%) would occur in a context of price normalization and would allow France to escape recession, defined as two consecutive quarters of decline.
Activity would hold up in the fourth quarter thanks to services, commented Olivier Garnier, general director of statistics, studies and international at the Banque de France, presenting the new monthly economic survey of the French central bank.
The floods and storms which hit France in November had a limited impact on economic activity, he added.
According to some 8,500 business leaders interviewed between November 28 and December 5, activity increased in services in November and should continue to grow in December.
Management consulting for businesses, information services and automobile repairs – more in demand after the bad weather – performed well last month, unlike advertising and temporary work services.
Then, companies are counting on the fallout from the end-of-year holidays, particularly in the catering sector.
In industry, activity should contract in December, after stagnation in November, the dynamism of aeronautics or pharmaceuticals having been counterbalanced by the decline in automobiles or IT products.
In construction, the structural work should continue to suffer in December, as in November, while the second work should stabilize after weak progress.
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 share 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.