French central bank raises growth outlook as economy booms.
outlook
(Reuters) – PARIS– The French economy is rebounding faster than anticipated this year as the COVID-19 issue fades, according to the central bank,
which raised its growth forecast for the year.
The Bank of France stated in its quarterly forecast that the euro zone’s second-largest economy is on track to expand 6.3 percent this year,
up from 5.8 percent originally anticipated in June.
Following the acceleration of the country’s vaccination program in the second quarter and the lifting of coronavirus limitations,
the economy has exceeded most forecasts in recent months, enabling most companies to resume operations.
The central bank’s adjustment raises its forecast slightly higher than the government’s,
which is basing its 2022 budget on the premise that the economy would expand 6% this year.
As a consequence of the faster-than-expected recovery, growth will be somewhat lower next year, with more of the recovery concentrated in 2021.
The central bank predicted that the economy would expand 3.7 percent in 2022 and 1.9 percent in 2023, respectively, down from earlier estimates of 4.1 percent and 2.1 percent.
The central bank projected that the economy was just half a percentage point below pre-crisis levels in September,
and that it would be back to normal levels by the end of the year for the first time since the pandemic broke out, based on the results of its monthly poll of 8,500 companies.
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The central bank forecasted that the economy will expand by close to 2.5 percent in the three months leading up to the end of September.
That would be more than twice the second-quarter increase of 1.1 percent.
With the economy growing, half of the businesses were experiencing personnel issues,
while more than half of industrial businesses and 61% of construction businesses were experiencing supply-chain issues.
Inflation is projected to average 1.8 percent this year, then falling to 1.4 percent the next year and 1.3 percent in 2023. Despite the robust recovery,
unemployment is expected to remain relatively constant between now and 2023, at 8.1 percent -8.2 percent.
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