Europe 1 with AFP // MARTIN NODA / HANS LUCAS / HANS LUCAS VIA AFP 9:59 p.m., March 12, 2024
The Banque de France announced this Tuesday that it was lowering its growth forecast for the French economy in 2024, now estimating it at 0.8%.
A decline linked to “less growth gains at the end of the fourth quarter of 2023”.
The Banque de France revised its growth forecast for the French economy in 2024 downward on Tuesday, now estimating it at 0.8%, but nevertheless expects "a more pronounced rebound" in 2025 and 2026 than initially expected. .
The French central bank, which until now expected an increase of 0.9% in gross domestic product (GDP) this year, revised this forecast "very slightly downward" because of "less growth in the "from the fourth quarter of 2023", she detailed in a press release.
This forecast, which constitutes a very slight slowdown compared to 0.9% for 2023, is above all less optimistic than the government's forecast of 1%, on which it has built its entire 2024 budget and its trajectory for reducing the public deficit.
“On the other hand, we expect a more pronounced rebound in 2025 and 2026, driven by more favorable assumptions on energy prices and financial conditions,” the institution indicated.
The central bank now forecasts growth of 1.5% in 2025 (compared to 1.3% initially forecast) and 1.7% in 2026 (compared to 1.6%).
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A decline in inflation expected
The new projections from the Banque de France “confirm the expected decline in inflation” during its previous estimate in mid-December.
Inflation would still reach 2.5% on annual average in 2024, after 5.7% in 2023, measured according to the harmonized consumer price index (HICP) allowing comparison between European countries.
It would then continue to decline "significantly" to fall below the 2% mark at the start of 2025 (which is the inflation target of the European Central Bank), reaching 1.7%.
A level at which it would remain in 2026.
“Food and industrial consumer goods” should only experience “measured price increases in 2025-2026”, estimates the Banque de France, “while final energy prices would fall over these two years”.
Outside of energy and food, prices will fall more slowly, as evidenced by underlying inflation, which excludes the volatile prices of these two categories: estimated at 2.4% this year, it should decrease to 2.2% in 2025, only to return below 2% in 2026 (to 1.9%).
Furthermore, the Banque de France predicts that the increase in wages will be higher in 2024 than that of prices, “which would support purchasing power”.
The unemployment rate should first increase slightly to reach around 7.8% from the end of 2024 to the end of 2025, "before resuming its decline in 2026", where it should stand at 7.5%.