The Banque de France will soon revise “a little upwards” its growth forecast for France in 2023, hitherto set at 0.7%, its governor François Villeroy de Galhau said on Friday in Paris. “If we look at the rest of the euro zone and particularly Germany, the French economy is holding up better today than most of its neighbours,” he explained during a breakfast organized by the Association of Economic and Financial Journalists (Ajef). The Banque de France therefore plans to raise its growth forecast during the next update of its macroeconomic projections, on 18 September.
It could thus approach, or even join the government’s growth forecast, which is counting on a 1% increase in GDP in 2023. The governor’s remarks come the day after INSEE confirmed unexpected growth of 0, 5% of French GDP in the second quarter. With this figure, the growth overhang in mid-2023 already reaches 0.8%, which means that annual GDP growth will be at least equivalent to this figure even if activity stagnates in the second half of the year.
Less than two weeks before the next meeting of the European Central Bank (ECB), François Villeroy de Galhau also estimated that this institution was “close or very close” to the “high point” of its interest rates, constantly raised since 2022 in an attempt to curb inflation in the euro area. The ECB raised its rates for the first time in mid-July 2022. It has chained eight increases since then, bringing its rates to 3.75%, a record since the spring of 2001.
Before the next meeting of European central bankers on September 14, “our options are open” between further rate hikes or the status quo, François Villeroy de Galhau said on Friday. “We are close or very close to the high point of our interest rates, but we are still far from the moment when we could consider lowering them,” he warned.
