16 Jun 2022
The French economy should avoid falling into recession in Q2 after a contraction between January and March, according to the central bank.
France’s economy – the second largest in the eurozone – will grow by around 0.25% in the second quarter, compared to Q1 when it shrank 0.2%. The Bank of France has upwardly revised its Q2 forecast following a 0.2% prediction made last month.
“After the first quarter pullback, activity in the second quarter will show resilience, which is to say that clearly the French economy won’t be in recession,” the Bank of France chief economist, Olivier Garnier said during a news briefing.
The growth estimate by the central bank is based on findings from its monthly poll of 8,500 companies. Respondents stated that business was forecast to make a marginal improvement in the services sector this month, remain stable in industry and endure a slight fall in construction, Reuters news agency reports.
The number of industrial firms reporting supply chain issues declined in May to 61% from April’s reading of 64%, yet in the construction sector, businesses experiencing supply chain problems rose to 55% from 54%.
In addition, as industrial companies are faced with less pressure on acquiring inputs, 42% of the sector’s executives reported increasing sales prices last month, a marginal decline from 41% in April, whilst in services prices were predominantly stable at 24%, the Reuters report adds.