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(Bloomberg) — France’s economy is set to maintain its momentum this quarter, thanks to growth in key sectors and cooler inflation, according to the central bank.
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Gross domestic product will probably rise 0.2% in the three months through September, the Bank of France said Tuesday, citing its monthly poll of businesses. That would match the pace seen in the previous period and is a bit stronger than the 0.1% predicted by analysts surveyed by Bloomberg.
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The central bank said activity will continue to be driven by services including transportation, information and communication, while manufacturing also rebounded in August. Looking ahead, the energy sector is set to expand, though construction will decline further on fewer public contracts.
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At the same time, the Bank of France warned of “significant uncertainty,” citing the “geopolitical situation in the Middle East and weather conditions through the end of summer, when new heat waves could still occur.”
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According to the 8,500 business leaders who participated in the survey, rises in raw-material costs and selling prices moderated in July.
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“The easing of the increases observed and anticipated for August could indicate that a significant portion of the pass-through to selling prices of the rise in input costs that occurred in the spring has already taken place,” the central bank said.
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Its assessment adds to mixed signals on the health of the euro area’s second-largest economy before next year’s contentious presidential election. While output rebounded in the second quarter, unemployment reached the highest level in almost six years and the government continues to grapple with a hefty budget deficit.
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