French central bank nudges up Q1 economic growth forecast to around 0.2%

PARIS (Reuters) – The French economy is set to grow around 0.2% in the first quarter of 2023, up from around 0.1% forecast last month, the central bank said on Tuesday, as activity in three main sectors picked up steam.

The Bank of France said companies polled in its monthly business sentiment survey reported activity in March was stronger than in February in the industrial sector, as well as in services and in construction.

The improving sentiment comes despite widespread strikes against pension reform that have weighed on transport and energy. Millions have taken to the streets in protest after President Emmanuel Macron’s government pushed through a plan to raise the retirement age by two years to 64.

For April, companies expected a further improvement in services and the industrial sector, but a decline in construction, the central bank said.

Meanwhile, supply chain troubles eased further in construction, with only 20% of companies mentioning them as an issue in March against 24% in February. The situation also improved in the industrial sector in March where the ratio declined to 30% from 33% in February.

In March, raw material prices were stable overall, except in agro-food and aeronautics, where prices continued to rise.

For April, companies expect a further decline in selling prices in the industrial and services sector and stability in construction.

The number of firms having staffing troubles remained high in March at 52%, the central bank said.

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