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Growth is back faster than expected, according to the Banque de France.<\/p>\n
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The banking institution doubled today its forecast for France’s gross domestic product (GDP). It should finally grow by 0.6%<\/strong>, instead of the 0.3% initially envisaged. The Bank of France remains more cautious than the OECD, which on Friday raised its forecast by one point to 0.7%, and then the government, which is banking on 1% growth.<\/p>\n <\/p>\n “The recovery phase would clearly start again in 2024<\/em><\/strong>\u201d, thanks to the take-off of household consumption, the Banque de France estimates. The Bank is still expecting growth to jump to 1.2% in 2024 and then to 1.7% (instead of 1.8%) in 2025<\/strong>.<\/p>\n <\/p>\n This year, the better performances announced are linked to the conjunction of “a little more growth<\/em><\/strong>” of the world demand and “a little less inflation<\/em><\/strong>,” according to Olivier Garnier, the central bank’s chief economist.<\/p>\n <\/p>\n <\/p>\n Food inflation<\/strong>, which has taken over from energy inflation as the driver of price increases, is expected to peak<\/strong> “towards the end of the first half of the year”.<\/em><\/strong><\/p>\n \u00a0<\/em><\/strong><\/p>\n Prices would then rise more slowly, thanks to “the expected easing of agricultural input prices (…) and international agricultural commodity prices”. <\/em>However, the Bank “does not expect food prices to fall by 2025<\/strong>“.<\/em><\/p>\n <\/p>\n At the same time, the Bank forecasts a revival in household consumption <\/strong>thanks to a more dynamic average wage per capita <\/strong>(including overtime and bonuses). This should grow by 6% in 2023, 4.6% in 2024, and 3.7% in 2025. Purchasing power, however, is not expected to increase in the same proportions.<\/p>\n <\/p>\n On the employment front, an improvement is expected in 2025<\/strong>, with a “decline” in the unemployment rate. However, the latter should increase in 2023 and 2024.<\/p>\n <\/p>\n <\/p>\n On the subjects – pension reform and banking shocks<\/strong> – that have recently clouded the macroeconomic horizon, the Banque de France has tried to be reassuring.<\/strong><\/p>\n <\/p>\n On one hand, it does not believe that the tensions linked to the opposition to the pension reform will have a lasting impact on the economy.<\/p>\n <\/p>\n As for the two events that have affected the banking sector – the closure of Silicon Valley Bank in the United States and the uncertainty surrounding Credit Suisse – they “do not concern French and European banks<\/em>,” said Fran\u00e7ois Villeroy de Galhau, Governor of the Banque de France, on France Inter. French banks<\/strong> that he even described as “very solid.”<\/strong><\/p>\n <\/p>\n Is everything going well in the best of all possible worlds? While the tone of the Banque de France is reassuring, it notes a few downsides and uncertainties, namely a less buoyant “financial environment<\/em>,” with exchange rates and borrowing rates less well-oriented<\/strong> than in December.<\/p>\n <\/p>\n Read also >Bankruptcy of the SVB : are we heading for a new financial crisis?<\/a><\/p>\nFood inflation: a peak in mid-2023<\/h2>\n
Reassuring<\/h2>\n