The Banque de France forecasts "modest" GDP growth in the 1st quarter

"Barring any new unforeseen shock in the weeks or months to come, the risk of a recession during this winter can now be ruled out", underlines Olivier Garnier, general director of statistics, studies and international, to the Bank of France.

The forecast is in line with the expectations of INSEE (National Institute of Statistics and Economic Studies) unveiled on Tuesday (0,2% increase in GDP in the first and second quarters of 2023, after +0,1% in the last quarter of 2022 ).

According to the Banque de France, which surveyed some 8.500 companies between January 27 and February 3, activity increased more than expected in January compared to December, mainly thanks to the “dynamism of activity in market services” .

In February, the GDP should be in "low growth" compared to January, with various trends in the three sectors covered by the survey: activity should progress in industry and services but fall back in construction.

So many elements that push the central bank to consider quarterly growth "slightly positive".

Over the whole of 2023, the central scenario of the Banque de France forecasts GDP growth of 0,3%, significantly lower than that envisaged by the International Monetary Fund (0,7%) or the government (1 %).

In January, the proportion of companies that declared supply or recruitment difficulties to the Banque de France continued to decline. Concerns about the impact of energy prices on activity or margins over the next three months have remained fairly stable.

Conversely, the opinion of industrial contractors on the state of their order book continues to tumble, while building professionals are experiencing a slight resurgence of optimism. In both sectors, the balance of opinion is close to its fifteen-year average.

"The issues, which were more on the supply side, are gradually shifting to the demand side", sums up Olivier Garnier.

Finally, the opinion of entrepreneurs on their cash flow remains at a level well below its average for the past fifteen years.

In a context of unprecedented inflation since the 1980s, a third of companies increased their selling prices in January in industry (33%) and services (32%), and 43% in construction. These percentages are expected to fall in all three sectors in February, according to the Banque de France.