French economy set for fourth quarter growth slightly below 0.75% - central bank

The French economy is set to grow a bit less than 0.75% in the final quarter of this year as firms grapple with an increasingly uncertain health situation, the central bank said on Tuesday.

With France now in its fifth wave of COVID-19 outbreaks, the outlook was marginally less optimistic than last month when the Bank of France forecast 0.75% growth from the third quarter.

Prime Minister Jean Castex said on Monday night clubs would be closed ahead of Christmas and social distancing measures tightened, but ruled out a new lockdown because nearly 90% of eligible people have been vaccinated.

Drawing on the findings of its monthly survey of 8,500 firms, the central bank said companies expected improved business conditions in the industrial and services sectors, while activity was seen stable in construction.

Led by the dominant service sector, staffing difficulties worsened slightly with 51% of all firms reporting trouble getting enough workers in the survey conducted Nov. 26-Dec. 3 after 49% in October.

Meanwhile, supply chain problems also got worse in the industrial sector, rising to 57% from 56% in October with the car industry worst hit. However, supply problems in construction eased to 56% from 58%.

Against that backdrop, the central bank estimated the economy was operating at 0.75% above pre-crisis levels of activity this month.


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