The Banque de France is currently maintaining its 2024 growth forecast

In its new macroeconomic forecasts, finalized at the end of May, the French central bank forecasts an increase in GDP of 1,2% next year and 1,6% in 2026, down slightly compared to its forecasts published in March, of 1,5% and 1,7% respectively.

These revisions are due, in part, to the 20 billion euros in savings announced by the government for this year, the negative effect of which on economic activity is partially offset by economic growth in the first quarter that is better than previously expected. expected, at 0,2%.

On the other hand, they do not at all take into account the possible economic consequences of the dissolution of the National Assembly, announced on Sunday by President Emmanuel Macron.

From the start of the press conference to present these forecasts, Tuesday morning, the Director General of Statistics of the BdF, Olivier Garnier, warned that he would make "no comment" on political news.

The document published Tuesday recalls that the forecasts are made on the assumption of "unchanged economic policy".

Which might not be the case if the majority changed in July, notably to the benefit of the National Rally.

“High hazards”

Excluding possible new political circumstances, "our central scenario remains that of a gradual exit from inflation without recession, allowing a clearer resumption of growth in 2025 then 2026", indicates the BdF, while specifying that "the vagaries around of this central scenario remain high".

For this year, the BdF maintains the hypothesis of “moderate growth” in GDP. “Household consumption would, however, benefit from the rebound in purchasing power linked to the fall in inflation,” she notes.

Growth would “strengthen” in subsequent years, “further supported by the recovery in private investment as interest rates ease.”

The central bank envisages a “significant” decline in total inflation, to 2,5% on average this year after 5,7% last year, and before 1,7% in 2026 and 2027, “due to the decline prices of food, energy and manufactured goods", while inflation in services would "fall more slowly".

This forecast is associated with the hypothesis of a “significant reduction” in the budget deficit, “reduced to around 4% of GDP in 2026”, specifies the BdF.

She also envisages that employment would “adjust with delay” to the slowdown in activity, with an unemployment rate ultimately better than expected in 2024, at 7,6% at the end of the year. It would increase temporarily in 2025, to 7,9%, before falling again "in the wake of the resumption of activity", to settle at 7,6% at the end of 2026.

The BdF also published its monthly economic survey on Tuesday, carried out among 8.500 business leaders at the end of May and the beginning of June.

Its results allow us to anticipate “very slight” GDP growth in the second quarter, of between 0% and 0,1%.

Mr. Garnier, however, stressed on Tuesday that certain data from the survey should be interpreted with caution, due to the high number of holidays and business closures linked to the positioning of the May public holidays this year.

Activity should be more sustained in June, while "the moderation of sales prices continues", and "recruitment difficulties continue their slow decline".