INSEE kept its growth forecast at 2.6% in 2022. But inflation and fears about energy supply could cause activity to slow.
France’s gross domestic product (GDP) is expected to stagnate this fall, but fears over energy supplies and high inflation are causing “strong threatson growth in Europe, INSEE said on Thursday. In its economic report, the National Institute of Statistics maintained its growth forecast of 2.6% in 2022 for France, but does not rule out a drop in activity in the fourth quarter in the event of economic difficulties, energy supply and production stoppages. .
INSEE bases its forecast on modest growth in the third quarter (+0.2%, as announced in the September economic update) after a dynamic second quarter (+0.5%), specified in this note entitled “An autumn full of threats for Europe“. Uncertainty hangs over the last three months of the year for a “darkening the international stage“Julien Pouget, head of the INSEE situation department, declared during a press conference on Thursday. “Slowdown in international trade between now and the end of the year, inflation that remains high, Europe-specific concerns about energy supply, tightening of monetary policies in the context of increased market volatility“, he listed to illustrate the threats to French but also global growth.
Fears for “possible production stoppages”
The forecast for GDP stagnation in the fourth quarter is therefore a “middle stage” what includes “Resilienceof certain indicators, but also of thefears associated with possible production stoppages” in industry. Inflation, contained in September (5.6% in one year) in particular thanks to the discount at the pump, should decrease slightly in October then “would rise againin November with the reduction of the fuel subsidy, reaching 6.4% per year in December (compared to the 6.6% previously forecast).
Throughout the year, the inflation forecast goes from 5.3% to 5.2%, a much better forecast than for other European countries thanks to the “energy prices” and to “public policies put in place to limit price increasessays Julien Pouget. However, the rise in prices is weighing down the purchasing power of households, which should fall more than expected in 2022 (-0.6% according to the indicator per unit of consumption, compared to -0.5% initially forecast) . If the support measures make it possible to limit energy prices, food has weighed the most since September, with year-on-year inflation expected close to 12% at the end of the year.
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