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Economics

Bank of France Outlook Fuels Doubts Over Government Optimism

  • French economy to grow 0.3% in 2023, central bank forecasts
  • Inflation to reach 7.3% at the end of 2022, forecasts show
 

Inflation has hit consumer-spending power.

 

Inflation has hit consumer-spending power.

Photographer: Cyril Marcilhacy/Bloomberg

The French economy is heading into a sharp slowdown this winter from which it will recover only gradually, according to Bank of France forecasts that cast further doubt over the economic optimism of President Emmanuel Macron’s government. 

Weaker demand for French exports, stronger inflation and higher interest rates than previously envisaged mean the central bank predicts growth slowing to just 0.3% in 2023 — far short of the 1% the Finance Ministry has written into the budget. It said a recession can’t be ruled out, even though it would be temporary and limited.