PARIS (Reuters) – The French economy should have recorded growth of 0.2% in the fourth quarter and thus escape recession, after a decline of 0.1% in the previous quarter, thanks in particular to the increase in market services , estimates the Banque de France (BdF) on Wednesday in its monthly economic survey (EMC).
A recession is defined by two successive quarters of GDP contraction.
In December, the BdF had forecast growth of only 0.1% in the fourth quarter.
“This forecast is revised slightly upwards (…) due to both EMC results in December that are better than anticipated by businesses last month and a manufacturing production index up in November “, writes the BdF in its survey carried out among 8,500 companies.
“Activity would be driven this quarter by market services, thanks in particular to information-communication, accommodation and catering and business services. In the manufacturing industry, added value should rebound after the decline in the third quarter” , she adds.
The central bank, however, warns that the small improvement may not last.
“In January, according to business expectations, activity would progress at a slower pace in industry and services, and would contract in construction,” underlines the EMC.
On the positive side, on the other hand, “the opinion on the situation of order books in industry stopped deteriorating in December”, notes the BdF, which specifies that “most sectors benefit from this dynamic, more particularly visible in aeronautics, whose order books, already high, are progressing significantly.
“In the rest of the industry, the level of notebooks is generally considered low,” she recalls, however.
On the inflation front, the moderation of sales prices continues, underlines the BdF, which points to a stabilization of the prices of raw materials and a slight increase in the prices of finished products.
“As the price review period at the start of the year approaches, the proportion of business leaders planning to raise their prices in January reaches 18% in the industry, compared to 34% in January 2023,” she says.
(Written by Tangi Salaün, edited by Blandine Hénault)
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