Paris Olympics Eclipse Political Turmoil With Boost to Economy
(Bloomberg) -- France will record an acceleration in growth in the third quarter as the Paris Olympics help the economy temporarily shake off the impact of months of political uncertainty, a Bank of France survey showed.
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Activity increased in services and industry in August, and business leaders expect a slight improvement in September, according to the central bank’s monthly poll of 8,500 firms.
Excluding the boost from the Games, the Bank of France repeated its forecast that growth will slow to between 0.1% and 0.2% in the third quarter. It reaffirmed that hosting the event should add 0.25 percentage points to that expansion due to elements not covered in the survey such as ticket sales and TV rights.
The Olympics coincided with a period of political turmoil after snap elections in early July delivered a deeply divided parliament with no group able to form a majority to govern. President Emmanuel Macron named a new prime minister only last week, and the cabinet is yet to be appointed.
The Bank of France said on Tuesday that its uncertainty indicator was little changed in services and industry, while it deteriorated in construction. Business leaders mentioned delaying investment decisions and concerns about public investment.
According to the survey, construction activity declined in August, and executives in the sector expect no improvement this month.
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