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The French economy is set to slow sharply in 2023 due to the energy crisis and inflation, but should recover some lost ground in 2024 and 2025, the Bank of France forecast on Saturday.
GDP growth will slow from 2.6 percent in 2022 to 0.3 percent in 2023, according to the central bank's "most probable" macroeconomic scenario for the next three years.
The slowdown in growth will be followed by a 1.2-percent rebound in 2024. That is lower than the 1.8 percent previously anticipated, because "the winter of 2023-24 could still be a bit complicated due to the energy crisis," Director-General Olivier Garnier said.
The rebound will continue in 2025, when growth is expected to reach 1.8 percent, the bank said.
However, the projections remain highly uncertain due to extremely volatile energy prices and geopolitical tensions – particularly the Russia-Ukraine conflict.
The Bank of France's outlook is less optimistic than the government's, which forecasts 2.7 percent growth in 2022 and 1 percent in 2023.
"We can't rule out a recession but if there is one it will be limited and short-lived," Garnier said.
Oil and gas prices are expected to fall back from the peaks seen this year but remain high and continue to feed inflation. Prices will have risen 7.3 percent by the end of 2022.
Inflation will continue to rise in the first half of 2023 before dropping back to 4 percent by the end of 2023 and 2 percent at the end of 2024, the central bank said.
(AFP with edits; cover via CFP)
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Disinformation report hotline: 010-85061466