The Bank of France is slightly more optimistic about growth in the second quarter

The Bank of France raised its growth forecast for the second quarter to 0,2% on Thursday, July 9, whereas it had previously expected stagnation, with activity being driven by industry and market services, without any significant negative effect from the heatwave.

"This is generally good news since we were anticipating no growth in GDP in the second quarter" in the previous estimate, said the Bank of France's chief economist, Xavier Debrun, when presenting the institution's new monthly business survey.

This upward revision could allow annual growth to "get closer" to the government's forecast, which was lowered on Tuesday from 0,9% to 0,7% for 2026. The Bank of France, for its part, is forecasting 0,5%.

According to the survey conducted by the central bank among 8.500 companies between June 26 and July 3, activity strengthened "significantly" in June in industry, particularly in defense, technology, automotive and agri-food.

"Companies affected by the heatwave in the second half of June changed working hours and generally managed to maintain their volume of activity," noted the Bank of France.

"The agri-food sector is driven by sales of fresh produce, ice cream and drinks, while the chemical sector continues to benefit from sustained orders, in anticipation, in particular, of future price increases," she explained.

In the commercial services sector, activity rebounded in June. The heatwave particularly benefited accommodation offering air-conditioned rooms, while the restaurant industry suffered.

The building is progressing, in both the structural and finishing work, where the installation of air conditioning systems has accelerated.

Although down in industry (11% compared to 13% in May), supply difficulties remain "severe" for certain segments, such as computer and electronic products (18%) and aeronautics (36%).

Thanks to easing commodity and energy prices, selling prices rose less sharply in June than in the previous month.

The uncertainty indicator, based on a textual analysis of comments from surveyed companies, continued to ease, returning to pre-conflict levels in the Middle East at the end of February, although business leaders still expressed concern about international tensions.

For July, business leaders are forecasting "a further increase in activity, although more moderate in industry and services, and quite weak in construction".

Illustrative image of the article via Depositphotos.com.