French Growth to Get a Lift From Olympics, Bank of France Says
(Bloomberg) -- The Paris Olympics will drive an acceleration in French economic growth in the third quarter, according to a monthly survey by the country’s central bank.
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The Bank of France said GDP is set to increase between 0.35% and 0.45%, compared with 0.3% expansion in the two previous periods, thanks to revenue from ticket sales for the Games and TV rights contracts. The full impact on activity has yet to be assessed, it added.
The poll of 8,500 companies, carried out between July 22 and Aug. 5, also showed French business uncertainty has eased since surging during the surprise snap legislative elections held earlier in the summer. Still, it remains higher in the industry and services sectors than before President Emmanuel Macron dissolved the National Assembly on June 9.
“It’s still too early to see how this uncertainty will impact hiring and investment decisions,” the central bank’s chief economist, Olivier Garnier, told reporters on Friday.
The survey was conducted after legislative elections delivered a hung parliament with no one political group in a position to form a workable majority. During a turbulent campaign, investors reckoned with the possibility that parties with pledges to undo Macron’s pro-business reforms could take power.
The president is yet to appoint a new prime minister who can form a government. Macron has said he’ll wait until at least after the end of the Olympics and has called for compromise between different parties to form a majority.
Heading into the political uncertainty, the euro area’s second-biggest economy was on a sound footing, with stronger-than-expected growth in the first half of the year helping to steady the outlook for the country’s stretched public finances.
Earlier on Friday, data from statistics agency Insee showed the French jobless rate fell to 7.3% in the three months through June. Economists surveyed by Bloomberg had expected the level to be unchanged at 7.5%. Macron has made “full employment” a core goal of his second term ending in 2027.
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