French growth experienced a downturn at the end of last year, but it is not a fatality: the Bank of France indeed predicts a gross domestic product that will rise again for the first quarter.
A “temporary hiccup”
The negative growth registered by the French economy in the last quarter had undermined the government’s hypothesis: the latter hoped for 1.3%, but had to settle for 1.2% due to the 0.1% decline in growth during the last three months of the year. A catastrophic scenario caused largely by the strike against pension reform which severely impacted the country’s activity. The Bank of France, relying on its monthly business survey, believes this is just a “temporary hiccup,” according to its governor-general, François Villeroy de Galhau, speaking to Europe 1: growth in the first quarter should indeed stand at 0.3%.
In January, activity rebounded in the IT-electronics sector, accelerated in services (notably in accommodation and catering), and in construction. In the latter sector, business leaders foresee sustained growth in February, but not in services where a slowdown is expected. Industrial production contracted in January, but is expected to recover in February.
A forecast of 1.1% for the year
INSEE, for its part, forecasts growth of 0.2% in the first quarter, and 0.3% in the second. The Bank of France estimates that the growth rate should hover around 0.3% for each quarter, with a forecast of 1.1% for the entire year. The government hopes for a GDP increase of 1.3%.
