2023-09-01 08:38:19
The Banque de France and its growth forecasts for 2023
The Banque de France surprised this Friday 1is September 2023 by announcing a possible future upward revision of its growth forecast for 2023. Initially estimated at 0.7%, this growth could be revised upwards during the next update of macroeconomic projections scheduled for September 18, 2023. François Villeroy de Galhau, Governor of the Bank, highlighted the resilience of the French economy, particularly compared to economic giants such as Germany.
The Banque de France’s new growth estimate could approach that of the government, which anticipates GDP growth of 1% for 2023. This synchronization of forecasts is all the more notable as it comes after INSEE’s confirmation of unexpected growth of 0.5% in French GDP in the second quarter.
Interest rates: a challenge for the ECB
The European Central Bank (ECB) is at the center of economic discussions because of its decisions regarding interest rates. Since 2022, in an attempt to control inflation in the euro zone, the ECB has raised its rates several timesreaching an all-time high of 3.75%, a high not seen since 2001.
François Villeroy de Galhau raised the possibility that the ECB is “close or very close” to the “high point” of its interest rates. As the meeting of European central bankers approaches on September 14, 2023, the question remains: will we see another rate hike or a continuation of the status quo?
Inflation in the euro zone: a major challenge for growth
Inflation in the Eurozone is a major concern. Despite a drop in energy prices and a slowdown in the rise in food prices, inflation remained stable in August 2023 at 5.3%. These figures show a pause in the slowdown in inflation seen since May 2023. Nevertheless, INSEE unveiled data on inflation in France on August 31, 2023 which show a rebound. It stood at 4.8% over one year, against 4.3% the previous month.
The ECB, with its objective of bringing inflation down to 2%, is in a delicate position. High interest rates have already impacted borrowing costs and reduced credit flows, which should theoretically help reduce inflation. However, the ECB is waiting for clearer signs before deciding on the next step.
1693565977
#Banque #France #sees