Banque de France: Ukraine war adds to ‘foggyness’ amid slowing growth and rising inflation

Villeroy noted that any additional financial support should remain “limited and temporary”, and the French government should not repeat the “whatever cost” approach it took to support the economy during the Covid pandemic.

“The shock is less powerful this time, but it may have more long-term consequences,” he said.

Olivier Garnier, chief economist at the Bank of France, explained that the economy, which actually reached pre-crisis levels last year, returned to slowdown in the short term, following the rise in energy prices, amid a recovery in production at a faster pace than the end of an economic activity cycle.

Garnier concluded, “In our scenarios, we assume more slow inflation than stagnation where we still have some growth.”