The Bank of France said in its quarterly forecast that France's GDP will grow by 0.8% in 2023, which is 0.1% lower than the previous forecast. Meanwhile, in 2024, a slight acceleration in economic growth is projected - up to 0.9% (unchanged from the previous forecast). The Bank of France also confirmed its forecast for GDP growth in 2025 at 1.3% and said that in 2026 the economy is likely to expand by 1.6% amid lower inflation and an increase in household purchasing power.
Meanwhile, the government's latest forecasts suggest that GDP will grow by 1% in 2023 and by 1.4% in 2024. Experts warn that if economic growth turns out closer to the Central Bank's forecast, the government may need to find extra savings in the budget to keep its deficit-reduction plans on track.
On the inflation outlook, the Bank of France expects CPI growth to slow from an average of 5.7% this year to 2.5% next year and fall below the ECB's target level (2%) in the first quarter of 2025.
In addition, today Francois Villeroy de Galhau, ECB member and Bank of France governor, said that the ECB's interest rate cut should happen sometime in 2024, and inflation should fall to 2% between "now and 2025 at the latest."