PARIS, April 13 (Reuters) - France's economy grew marginally faster in the first quarter as some businesses rushed to place orders ahead of expected price rises following the outbreak of war in the
Bank of France Expects 0.3% Economic Growth in First Quarter of 2024
Central Bank’s Outlook and Economic Performance
First Quarter Growth Driven by Anticipated Price Rises
PARIS, April 13 (Reuters) - France's economy grew marginally faster in the first quarter as some businesses rushed to place orders ahead of expected price rises following the outbreak of war in the Middle East, the central bank said in its monthly outlook.
Growth Forecasts and Economic Projections
The euro zone's second-biggest economy likely grew 0.3%, up from the final quarter of last year when it had expanded 0.2%, the Bank of France said, offering a forecast in line with previous estimates.
The outlook supports the central bank's view that the economy will grow 0.9% this year "despite all the uncertainties linked to the conflict in the Middle East," Governor Francois Villeroy de Galhau said.
Business Climate Survey Insights
Drawing on its monthly business climate survey of 8,500 firms, the central bank said activity held up in March across industry, services and construction with factory output outperforming business expectations from the previous month.
Sector Performance
Manufacturing and Industry
Manufacturing was bolstered by strong momentum in aeronautics, nuclear power and defence, while services and building activity also remained broadly supportive.
Services and Construction
However, the central bank warned that the conflict in the Middle East was weighing on sentiment. Businesses were more cautious when assessing April, with uncertainty indicators rising sharply to levels last seen during the early months of Russia's invasion of Ukraine.
Supply Chain and Price Pressures
Renewed Supply-Chain Strains
Villeroy also flagged renewed supply-chain strains, particularly for companies reliant on petroleum-based products such as plastics and solvents, as transport disruptions and higher energy costs rippled through parts of industry.
Rising Prices and Business Responses
"More firms are signalling that they will increase prices in April," he said. While around 11% of industrial companies raised prices in March, in line with historical norms, that share was expected to rise to 23% this month, the survey found.
(Reporting by Leigh ThomasEditing by Peter Graff)
