French central bank sees third quarter growth of 0.3% despite political instability
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A French flag flies at the entrance of the Bank of France "Banque de France" building in Paris, France April 9, 2025. REUTERS/Abdul Saboor
PARIS (Reuters) -France's economy is set to maintain steady growth in the third quarter despite political uncertainty and trade tensions, buoyed by resilient service sector activity, the central bank forecast on Thursday.
The euro zone's second-biggest economy was on course to grow 0.3% from the second quarter when it also grew 0.3%, the Bank of France said in its monthly economic outlook, leaving its estimate unchanged from September.
Drawing on the findings of its monthly survey of around 8,500 businesses conducted between September 26 and October 3, the central bank said business activity continued to advance in the service sector in September and more moderately in manufacturing, while construction activity declined after several months of gains.
The survey was completed before Prime Minister Sébastien Lecornu resigned on October 6, leaving President Emmanuel Macron scrambling to find his sixth premier in less than two years.
"Business leaders highlight the national political climate and trade tensions," the central bank said, adding that the consequences of higher U.S. tariffs on activity were particularly mentioned in the agri-food and machinery and equipment sectors.
Order books remained thin in manufacturing and construction, while supply chain difficulties stayed generally low but ticked up slightly in electrical equipment and computer-electronics-optical products. Aerospace continued to face elevated supply constraints, the central bank said.
Meanwhile, recruitment difficulties eased to 17% of companies from 18% the previous month. Selling prices were broadly stable in manufacturing and services and falling in construction.
(Reporting by Leigh Thomas; Editing by Toby Chopra)
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