PARIS – The French economic system is ready to contract barely this quarter because of refinery strikes and nuclear reactor outages earlier than exercise recovers within the first half of subsequent yr, the INSEE official stats company mentioned on Thursday.
The euro zone’s second greatest economic system will contract 0.2% within the ultimate three months from the earlier quarter, INSEE mentioned in its newest financial outlook.
INSEE trimmed its forecast from a earlier projection for flat progress after refinery strikes and upkeep outages at some nuclear reactors diminished industrial output.
France was hit by a collection of refinery strikes in October that reduce automotive gasoline provides whereas upkeep points in France’s ageing fleet of 56 nuclear reactors diminished their energy output to a 30-year low.
The lack of nuclear output would reduce French financial progress by 0.4% this yr, INSEE mentioned.
Its newest forecast for fourth quarter GDP would go away France with progress of two.5% for the entire of 2022, barely decrease than the two.7% anticipated by the federal government in its finances planning.
Looking forward to subsequent yr, INSEE forecast France would return to progress within the first quarter with a price of 0.1% adopted by 0.3% within the second quarter.
Though its outlook didn't cowl all of 2023, INSEE mentioned that by mid-year, the economic system would have progress momentum of 0.4%. That implied progress of 0.75% could be wanted in each the third and fourth quarters to achieve the 1.0% full-year progress goal on which the federal government has based mostly its 2023 finances.
Turning to the outlook for inflation, INSEE mentioned it will preserve rising from 6.2% in November to peak in January and February at a 38-year excessive of seven% earlier than falling again to five.5% by the center of the yr.
Utilizing EU-harmonised methodology to calculate value adjustments, inflation hit 7.1% in November.
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