French Economy Growth in Q3

PARIS (Reuters) – The French economy is on course to grow at least 0.35% in the third quarter, benefiting from a temporary boost related to the Olympic Games, according to the central bank’s estimate on Friday.

Growth Forecast

The central bank forecasts underlying growth in the euro zone’s second-largest economy of 0.1%-0.2% for this quarter. This follows 0.3% growth in the previous quarter.

Olympic Impact

The Olympic Games are expected to add another 0.25% to economic growth, thanks to increased activity in hotels, restaurants, and businesses servicing the games.

Visa reported a 26% rise in sales for Paris small businesses during the first weekend of the Olympics compared to the previous year.

Business Sentiment

The French central bank’s estimates are based on a monthly business sentiment survey involving 8,500 firms. The survey indicated that the service sector expects increased activity this month, following a sluggish July due to fewer summer tourists before the Olympics.

Industrial Activity

Executives noted slow industrial activity in July but forecasted an uptick in August. Meanwhile, the construction sector anticipates a slowdown in August after a solid July performance.

Political Climate

Business uncertainty eased somewhat in July after parliamentary elections in June and early July led to a hung parliament. President Emmanuel Macron indicated he would appoint a new prime minister after the Olympic Games. The left-wing New Popular Front is actively seeking the position.