Growth in France is resisting, but for how long? On Wednesday, the Banque de France said it expected GDP growth of 0.1% in the second quarter, but pointed to an “uncertainty” among business leaders not seen since 2022. political context.
After rising 0.2% in the 1st quarter, GDP should grow at half the pace between April and June, supported by a “modest rebound” in activity in June, the central bank wrote. its latest monthly economic survey.
The survey of 8,500 entrepreneurs between June 26 and July 3 highlights the uncertainty of business leaders in a political context marked above all by early legislative elections on June 30 and July 7. These are the end The beginning of the second round saw the emergence of the New People’s Front (NFP). and so on The National Rally contingent increases significantly Number of deputies in the new National Assembly without any clear majority.
High level of anxiety
The Banque de France’s uncertainty indicator, based on the repetition of certain keywords in the responses of entrepreneurs, “reaches the highest levels since 2022, and even since 2021 in terms of services,” the central bank emphasized. “It is growing in all sectors, especially services, where it was initially the lowest (especially temporary work, accommodation and catering, transport, advertising),” he said.
“Many business leaders (…) note the waiting attitude of customers, the postponement of investments, including investments from abroad, as well as the freezing of hiring due to the lack of visibility of possible changes in spending salaries. ”, NFP who want to increase the minimum wage to more than 200 euros bringing it to 1,600 euros net.
The uncertainty indicator nevertheless remains below the level achieved in 2020 during the first two arrests related to the Covid-19 pandemic.
As a hope for the Olympics
This sharp rise in uncertainty among entrepreneurs is not yet clearly reflected in Q2 activity, explains Banque de France chief economist Olivier Garnier. It may even become more likely in the 3rd quarter Olympic and Paralympic Games rather, it should support activity.
The hosting of the world’s biggest sporting event in France, according to the INSEE economic report published on Tuesday It will contribute 0.3 points to GDP growth more than half (0.5%) of expected growth in the third quarter, or between July and September.
If Olivier Garnier expects a “positive effect” of the Olympic Games (July 26 – August 11) and Paralympic Games (August 28 – September 8) on activity, he does not risk giving numbers, preferring to comment on the observed developments in activity. 2nd quarter.