French Economy Expected to Rebound Quickly From Strike Impact
French Economy Expected to Rebound Quickly From Strike Impact
(Bloomberg) --
France’s central bank is expecting a punchy rebound by the economy at the start of the year after disruption by strikes and a surprise contraction at the end of 2019.
The Bank of France business indicators for January show economic growth resuming the pace it set for most of 2019, until December when prolonged protests over pension reform disrupted supply chains and depressed tourism and transport sectors.
The economy, which shrank 0.1% in the last three months of the year, is forecast to grow 0.3% this quarter. Bank of France Governor Francois Villeroy de Galhau on Friday called the fourth-quarter performance a “temporary hiccup.”
A prompt rebound in France would be reassuring for policy makers who are looking for signs of a stabilization in the euro-area economy. Those hopes were dealt a blow last week when data showed continued weakness in industry, which went well beyond France.
The French government has sounded more cautious in recent days, citing trade tensions and the threat to growth from the spread of the coronavirus.
“The international context is objectively more difficult today than it was at the end of 2019,” French Finance Minister Bruno Le Maire said Friday.
The Bank of France survey on Monday showed industrial sentiment was unchanged in January, four points below the long-term average. Services sentiment improved slightly.
To contact the reporter on this story: William Horobin in Paris at whorobin@bloomberg.net
To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Catherine Bosley
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