Rebound in growth expected by the Banque de France in the 1st quarter of 2020

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Rebound in growth expected by the Banque de France in the 1st quarter of 2020

Economic activity should start to increase in France in the first quarter of 2020. After a decline in the last quarter of fiscal 2019, growth could amount to 0.3% according to a first estimate released on Monday by the Bank of France. This forecast, based on the monthly business survey conducted by the Banque de France among business leaders, is based on a possible return to industry cruising speed in February, while activity in services and the building accelerated in January.

French growth was displayed at 1.2% for the whole of 2019, according to figures published at the end of January by INSEE, but gross domestic product (GDP) fell by 0.1% over the single last quarter, the activity having been strongly penalized by the strike movement against pension reform. The Banque de France therefore anticipates a rebound in early 2020, with a return to the growth rate observed in the first three quarters of 2019.

“There was a bad surprise in the fourth quarter (…). Our analysis is that it is a temporary hiccup and that the” France car “, if I dare say, for the French economy should regain cruising speed “, at around 0.3% per quarter in 2020, explained on Europe 1 Friday the Governor of the Bank of France, Fran├žois Villeroy de Galhau. INSEE for its part indicated in mid-December anticipating growth of 0.2% in the first quarter, then 0.3% in the second.

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In detail, in January, industrial production contracted slightly further, according to the Banque de France survey, particularly in aeronautics, the automobile and electrical equipment. Conversely, it has recovered in IT-electronics. For February, business leaders anticipate “a return to trend growth”, according to the Banque de France. In services and construction, activity accelerated in January. In services, it was the accommodation and food service, technical business and personal services sectors that were dynamic. But if business leaders expect “sustained” growth in construction in February, they anticipate a slowdown in services.

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For 2020 as a whole, the Banque de France forecasts growth of 1.1%, according to its forecasts released last December, the lowest rate since 2016, when it had reached 1%. The government, for its part, expects GDP growth of 1.3%.

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