The French economy is much stronger in the second quarter, according to the central bank | Money
PARIS, July 8 – The French economy grew twice as fast as expected in the second quarter, the central bank announced yesterday, as commercial activity soared after the lifting of restrictions linked to Covid- 19.
The Banque de France said the euro area’s second-largest economy grew by around 1.0% from the first three months of the year, while noting that supply bottlenecks and shortages staff had always combined to impede the recovery.
The bank maintained a growth forecast of 5.75% for 2021, expecting activity to resist the effects of a dreaded fourth wave of coronavirus infections.
The European Commission has estimated that the French economy will grow by 6.0% this year, the same figure launched last week by the national statistical agency Insee.
In the meantime, the French authorities have remained a little more cautious and are sticking for the moment to an annual growth forecast of 5.0%.
“June was better than expected by businesses,” said Olivier Garnier, CEO of the central bank, as he presented his latest monthly survey of business leaders.
Most industrial sectors have shown improvement and there have been strong advances in commercial sectors, especially among hotels and restaurants, the survey showed.
However, several industrial sectors, notably aeronautics and automobiles, were still only about three-quarters of the level observed before the pandemic.
Tensions in supply chains and rising raw material costs have been cited as slowing down activity, especially in the automotive and construction sectors.
Hiring was also an issue, with 44 percent of business leaders responding to the bank survey highlighting problems finding qualified staff, especially for construction and temporary work. AFP