Renewed optimism at the Banque de France.
In its latest forecasts published on Monday, the institution doubled its growth forecast in France for 2023 and now expects a 0.6% increase in gross domestic product (GDP), against 0.3% envisaged until then.
On the inflation front, the central bank is lowering its forecast for 2023. "
There is a little more growth and a little less inflation
," summed up the central bank's chief economist, Olivier Garnier.
For 2023, the institution justifies the doubling of its growth forecast by inflation (in particular energy) lower than expected, and “
higher growth in global demand
”.
These positive surprises are, however, offset by
the country's “financial environment
”, with exchange rates and borrowing rates less favorable than in December.
Even increased, the growth forecast for 2023 remains lower than those of the OECD (0.7%, raised by 0.1 point on Friday) and the government (1%).
Read also“French and European banks are extremely solid”, according to the Banque de France
An inflationary peak expected at the end of the first quarter
Another lesson: while food inflation has taken over from energy inflation as the main driver of price increases, it should peak "
towards the end of the first half
", according to Matthieu Lemoine, one of the authors of the projections. macroeconomic figures for 2023-2025 published on Monday.
Prices would then increase more slowly, thanks to “
the planned easing of the price of agricultural inputs (…) and the international prices of agricultural raw materials
”, explains the institution.
But "
we do not expect a drop in food prices on the horizon of our projection
", that is to say 2025, warns Matthieu Lemoine.
All goods and services included, the harmonized consumer price index (HICP) – the inflation barometer which refers to the European level and which the Banque de France uses in its projections – would stand at 5.4% on an annual average in 2023, against 6% expected so far.
The HICP would then fall to 2.4% in 2024 then 1.9% in 2025, below the 2% mark targeted by the European Central Bank (ECB).
Read alsoCoordinated action by the most powerful central banks in the world to improve access to liquidity
No inflationary spiral
These forecasts of activity and inflation are nevertheless dependent on “
numerous hazards
”.
"
The indirect effects of the recent banking and financial volatility should be closely monitored, as recent events caused by the closure of Silicon Valley Bank in the United States or the uncertainty around Credit Suisse have reminded us", details
the Bank of France.
The difficulties of American and Swiss banks have indeed caused chaotic sessions on European financial markets including the Paris Stock Exchange, investors fearing a major financial crisis.
But the governor of the Banque de France François Villeroy de Galhau repeated Monday morning on France Inter that French and European banks were not affected by this banking crisis.
“
French banks are very solid
” and “
no problem concerns French banks
,” he said.
And the institution does not believe either in a lasting effect on the economy of the tensions concerning the pension reform.
"
There may be temporary effects from one quarter to the next
", acknowledged Olivier Garnier, but "
when we reason over the multi-year horizon (...) it is not likely to significantly affect the projection
".
Read alsoJoe Biden urges Congress to “act to punish more heavily” the leaders of poorly managed banks
Increase in the average salary per head estimated at 6%
These uncertainties put aside, the Banque de France is therefore counting on a clear upturn in growth in 2024 (1.2% as anticipated in previous forecasts) and in 2025 (1.7% against 1.8%).
This relaunch should be supported in particular by an upturn in household consumption (+1.5% in 2024 and +1.6% in 2025), whose remuneration should experience more dynamic growth than in recent years.
The average salary per head, which includes overtime and bonuses, should grow by 6% in 2023, 4.6% in 2024 and 3.7% in 2025, without purchasing power jumping in the same proportions.
"
This increase in wages should not lead to an inflationary spiral
", specifies the Banque de France.
In terms of employment, the unemployment rate should experience a "
transitory
" increase in 2023 and 2024 before starting a "
decline
" again from 2025.