French Economic Rebound From Yellow Vests Weaker Than Expected

(Bloomberg) -- The French economy won’t recover as much momentum as previously expected after the disruption of the Yellow Vest protests, a Bank of France survey showed Monday.

The euro area’s second-largest economy will expand 0.3 percent in the first three months of the year, according to the Bank of France’s monthly business survey in February. The central bank previously forecast a 0.4 percent expansion.

The survey echoes growing concern that the euro area’s economy is not just suffering from temporary difficulties. The European Central Bank last week slashed its growth forecasts for this year and announced measures to expand its stimulus.

Still, the Bank of France’s survey showed business sentiment in manufacturing rose two points in February to 101, bringing it back above the long term average of 100. In services, the sentiment indicator was unchanged at 101.

Business leaders in both industry and services expect continued growth in March after a bounce-back in February, the Bank of France said.

©2019 Bloomberg L.P.