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French growth expected below 0.75% in the 4th quarter

The French economy is expected to have grown in the fourth quarter at a rate of slightly less than 0.75%, the Banque de France (BdF) said on Thursday, as businesses face an increasingly uncertain health situation with the spread of the Omicron variant of the coronavirus.

In a context of the fifth wave of the coronavirus epidemic in France, the central bank has revised its growth forecast for the October-December period to the margin, after indicating last month to fully expect an increase. by 0.75% quarterly.

Prime Minister Jean Castex announced on Monday that nightclubs would be closed for a month, until Christmas, and that social distancing measures would be stepped up. However, he ruled out the possibility of national reconfinement.

The companies polled by the BdF as part of its monthly economic survey said they expected an improvement in activity in the service and industrial sectors in December, as well as stable activity in the building industry. .

For all sectors, especially services, recruitment difficulties increased slightly, with 51% of business leaders saying they had problems hiring, up from 49% in October.

At the same time, supply chain problems continue to worsen for the industrial sector, where 57% of companies said they were penalized, up from 56% in October. In the construction sector, however, the situation has calmed down according to the executives interviewed, who are 56% to report difficulties, against 58% previously.

The Banque de France estimated that the economy was functioning in December at 0.75% above its pre-health crisis activity levels.

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