Even though it is still very complex to assess the consequences on the European economy of the attack on Israel by Hamas and its aftershocks, INSEE revealed this Thursday its economic forecasts for the end of the year . Statisticians are still banking on a concomitant slowdown in growth and inflation. On the gross domestic product (GDP) side, the institute maintains its vision of a slow increase in activity in the third quarter, at 0.1 %, before 0.2 % in the fourth. For the year as a whole, growth would then reach 0.9%, a level close to the government forecast (1%).
This slowdown will weigh on the job market. INSEE has thus revised downwards, following poor employment climate figures, its job creation forecasts. It now forecasts 133,000, mainly in the first half of the year, compared to 354,000 in 2022. Consequently, unemployment would recover slightly. In the second half of the year, it would reach 7.3% of the active population, compared to 7.1% at the start of the year. “We will see in December if we can talk about a turnaround in employment,” said Julien Pouget, the head of the economy for INSEE. For now, we’re just seeing a clear slowdown. »
Under the pressure of interest rate increases, inflation should also decrease gradually, at least under the – fragile – hypothesis of stable oil prices. In December, price increases would amount to 4.4 % over one year and 5 % on an annual average. This pressure on prices is not enough to trip up the purchasing power of households, which is expected to increase by 1.2% in 2023, due to the dynamics of wages, but also social benefits, largely indexed to inflation.
Also readHamas attack on Israel: is the price of oil likely to skyrocket?
Worried despite this overall comfortable situation, the French are cutting back on their consumption, which is expected to show a drop of 0.2% on average in 2023. “Three-quarters of households have changed their consumption habits due to inflation” , specified Olivier Simon, responsible for the economic summary.
These forecasts remain as always subject to numerous hazards: household arbitrations, commercial negotiations between producers and distributors, effects of monetary tightening… So many hazards multiplied in this period of intense geopolitical tensions, the conflict between Israel and Hamas potentially cause shocks on the energy markets in the coming weeks. “At this point, oil prices are up 5%. We are not currently in a situation analogous to the Yom Kippur War, even if it is of course a subject of intense vigilance for economies,” argued Julien Pouget.
On the industrial side, the war, which dramatically reinforces the underlying movement of fragmentation in the world, could result in increased tensions on supply.
