The Banque de France now forecasts for the year 2023 a growth of the French economy of “at least” 0.6%, while inflation slows down “really”, indicated Friday its governor, François Villeroy de Galhau. “Growth over the year 2023 (…) will be at least equal to what we forecast last March, that is to say at least 0.6%”, declared Villeroy de Galhau on Radio Classique, specifying that the Banque de France would update its projections until 2025 on June 20.
In the second quarter, the French economy should continue to resist modestly, with a 0.1% increase in gross domestic product (GDP) compared to the previous three months, according to the monthly economic survey published by the institution on Thursday. On the price front, it reported an improvement, although inflation remains high. “The good news is that there is a change in the trend in price increases from companies,” explained François Villeroy de Galhau. In industry, 10% of business leaders raised their prices in May against 50% a year earlier, he detailed, and “we see the same trend in services”. “That’s what reinforces our analysis: that we are passing the peak of inflation in France and in the euro zone,” he continued. “There is really a slowdown in inflation.”
By carrying out aggressive monetary tightening since the summer of 2022 to curb rising prices, the European Central Bank (ECB) aims to return to the 2% target by 2025. According to an initial estimate by the National Institute of statistics (INSEE), inflation in May benefited from a serious slowdown in energy which was at the origin of the inflationary shock but has since been supplanted by food. Prices thus continued to rise over one year, by 5.1%, but less sharply than in previous months (5.9% in April and 6% at the start of the year).
