The Banque de France estimated on Wednesday that the French economy should grow at a moderate pace, by 0.2%, in the second quarter, supported by the recovery of services, when industry and construction would suffer more from soaring costs. raw material.
At this stage, the war in Ukraine and the disruption of production chains linked to health restrictions in China are affecting the prices paid by companies more than their activity, estimates the French central bank in its monthly business survey.
On Monday, INSEE published a growth forecast of 0.25% for the second quarter, after the stagnation of gross domestic product (GDP) recorded in the first, a sign of the sharp slowdown in economic activity after the strong recovery of 2021. .
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Stable activity in the industry
According to data compiled by the Banque de France from approximately 8,500 companies, "
activity in April was generally stable in industry and improved in market services
", due to the "
normalization of the health situation
", and in May business leaders believe that it will "
progress
" further in services but "
more slightly in industry, while the situation in the building sector will change little
".
The war in Ukraine and the consequences of the zero Covid policy in China complicate the supply of companies, with a spike in the cost of raw materials, including energy.
If the automotive sector was already very penalized, new branches, such as agri-food and chemicals are now also strongly affected.
65% of companies in the industry report difficulties, ie 5 points more than last month.
As a result, “
industrialists say they are increasing their selling prices more and more frequently in response to persistent pressure on the prices of raw materials
”, underlines the Banque de France.
The French central bank, however, did not give an inflation forecast for the coming months, while INSEE estimates that it should reach 5.4% over one year in June.