Bank of France Sees Weaker Fourth-Quarter Growth After Attacksby
Manufacturing sentiment fell to 98 in November from 99
Hollande failing to create jobs as the National Front surges
The Bank of France cuts its forecast for fourth-quarter growth in the euro region’s second-largest economy, confirming business has been affected by the Nov. 13 terrorist attacks that killed 130 in Paris.
France’s gross domestic product will grow 0.3 percent in the final three months of the year, the Paris-based central bank said in a release on Tuesday. While that’s the same pace as in the third quarter, it falls short of the bank’s original estimate of 0.4 percent growth for the following period. Sentiment among manufacturers unexpectedly fell to 98 in November from 99 in October, while a service industry index dropped to 96 from 97.
The impact of the attacks risks undermining France’s economic recovery after the first signs of sustained growth since the Socialists took power in 2012. Still, unemployment rose to its highest in 18 years in the third quarter, and President Francois Hollande, who has made job creation a condition for his re-election in 2017, is battling the anti-European Union and anti-immigration National Front, to the point his government called on voters to support rival party The Republicans in ballots in three regions.
The data comes after Markit Economics said its composite manufacturing and services gauge fell to 51 in November from 52.6 in October. French Finance Minister Michel Sapin last week said the Nov. 13 terrorist attacks may displace spending from one sector to another though it is unlikely to diminish total domestic demand. Air France today said it expects a 50 million-euro impact on revenue last month due to the attacks.
Accor Chief Executive Sebastien Bazin said on Dec. 2 that he expects a “real economic impact” of the attacks on hotels in Paris with a dip in demand likely to last between two and four months. The Paris tourism office said preliminary data suggest business in the sector may take longer to recover than after shootings at newspaper Charlie Hebdo headquarters in January.