The Banque de France expects a slight increase in activity this summer

2023-08-09 15:18:49

This is one more sign of the resistance of the French economy. According to the latest Banque de France economic report published on Wednesday, in the third quarter, the increase in gross domestic product (GDP) would be “slightly positive” compared to the previous quarter. For now, the picture would be even more favorable than what was envisaged. In its survey carried out between July 21 and August 4, 2023 among 8,500 business leaders, the institution notes that in July, activity grew in all sectors: industry, services and construction. . “The slowdown is less pronounced than expected,” she said.

In the second quarter of 2023, French growth has already created a surprise. According to INSEE’s first estimate published at the end of July, economic activity increased by 0.5% between April and June: thanks to the good performance of exports, foreign trade made a positive contribution of 0.7 points. However, it will be necessary to wait until the end of August to find out if this figure is confirmed by the institute, revisions being common. Which would be good news for the government: the performance indeed brings the growth overhang to 0.8% at mid-year, a figure close to Bercy’s objective, which is counting on 1% growth in 2023.

Changing dynamics

For the experts, it already seems certain that economic activity will not maintain this momentum over the coming months. “Growth has been saved by foreign trade for three quarters. There is every chance that it will not last”, estimated at the end of July Bruno Cavalier chief economist of Oddo BHF in an interview with “Echos”.

Without being so explicit, the Banque de France experts seem to be going in the same direction. “Temporary factors supported activity in the second quarter.” “They should not further support growth in the third quarter,” they warn on Wednesday.

When the first estimate of GDP for the second quarter was published on July 28, Nicolas Carnot, director of economic studies and summaries at INSEE, had moreover indicated to “Les Echos”: “this figure of 0.5% is good but can be nuanced”. “If it is above expectations, the underlying trend of the French economy is more moderate,” he said.

Less full order books

Economists anticipate a more difficult year-end for the French economy.

Inflation remains high, credit has become more expensive for households and companies alike with the sudden rise in interest rates. Faced with weakened demand in France and abroad, order books are also less full… In industry and construction, “they remain” below their long-term average”, notes the Banque de France in its investigation. The only factor supporting activity over the next few months could be consumption. “At half mast for months, it could rebound thanks to an increase in household purchasing power linked to the expected decline in inflation and the dynamics of wages,” said Maxime Darmet, France economist at Allianz Trade.

However, projections remain subject to numerous uncertainties. Economists are following government and European Central Bank budget announcements like milk on fire.