(Bloomberg) — The Bank of France ruled out a recession this winter as its monthly survey showed stronger-than-expected growth despite a succession of external shocks.
(Bloomberg) — The Bank of France ruled out a recession this winter as its monthly survey showed stronger-than-expected growth despite a succession of external shocks.
Economic activity across all sectors progressed in January more than business leaders previously predicted, according to the poll of 8,500 firms. For February, they forecast that the pace will slow, with a slight progression in services, stability in industry and a decline in construction.
“The French economy is slowing but it’s resisting,” Bank of France Governor Francois Villeroy de Galhau said on France 2 television on Thursday. “Last autumn, we were worried about recession, but this morning, for 2023, I think I can exclude it, barring a major global event.”
Economists are becoming increasingly optimistic about the short-term outlook for the euro area’s second-largest economy after it eked out slight growth in the final quarter of last year and as the downdraft from energy prices eases.
National statistics agency Insee also ruled out a recession, predicting in forecasts on Tuesday that the economy would grow 0.2% in both the first and second quarters.
The Bank of France said the scope of its survey doesn’t allow it to make precise forecasts yet, but that growth in the first three months of the year should be “slightly positive.”
The central bank said levels of uncertainty measured by its analysis of business leaders’ comments declined in industry in January and were stable in services and construction.
French companies are also less concerned about the future impact of energy prices on activity, and their assessment of supply difficulties fell to the lowest level since the Bank of France began measuring the impact of bottlenecks in May 2021.
(Updates with comment from Bank of France Governor in third paragraph)
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