(Bloomberg) -- France’s economy is set to maintain slight growth in the final quarter of the year, dodging a contraction that has already hit the euro area as a whole, according to a survey by the country’s central bank.
A continued expansion in the services sector and a small rebound in industry will help lift economic output between 0.1% and 0.2%, the Bank of France said on Wednesday.
Its monthly survey of around 8,500 business leaders also showed that inflationary pressures continue to ease. There are fewer hiring difficulties, while the proportion of companies increasing prices is far below last year’s peak and close to pre-Covid levels.
The survey of the euro area’s second-largest economy will be a source of relief for the European Central Bank, which is seeking to avoid inflicting severe economic damage as it fights inflation with persistently high interest rates.
Data at the end of last month showed the euro area shrank slightly in the third quarter as the pace of price increases slowed to the lowest level in more than two years.
“There are two main lessons that stand out in this survey: Firstly that activity will continue growing in the fourth quarter even if it’s at a slow pace,” Bank of France Chief Economist Olivier Garnier said. “The second lesson is that the trend toward a normalization in price behavior of firms is confirmed.”
Still, Garnier said there are some areas of caution in the survey, including weaker order books in industry and construction. The central bank’s measure of uncertainty — based on text-mining of survey responses — has also begun to rise again, erasing part of the steady decline seen since the end of 2022.
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Bank of France Sees Economy Sustaining Growth in Fourth Quarter - BNN Bloomberg
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