French Economic Growth to Slow by Half Because of Yellow Vests

(Bloomberg) -- France’s Yellow Vests protests will cut expansion this quarter in half, according to statistics institute Insee, becoming the latest to outline the impact of the recent demonstrations.

Growth will slow to 0.2 percent from 0.4 percent in the previous quarter, it said Tuesday. In October, the institute had forecast that the economy would maintain a 0.4 percent pace.

French Economic Growth to Slow by Half Because of Yellow Vests

The downgrade mirrors that by the Bank of France, which cited the impact of the protests on industrial production and services activity. France’s composite Purchasing Managers’ Index dropped the most in seven years in December and is now at a level that suggests contraction.

Insee predicted the dip would be temporary, forecasting a return to 0.4 percent growth in the first quarter of 2019, followed by 0.3 percent expansion. According to Bloomberg’s most recent survey of economists, full-year growth will be 1.6 percent, matching the pace of 2018.

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