PARIS (Reuters) -France’s central bank said the economy “will grow slightly in the fourth quarter” as high political uncertainty contributes to a slowing pace of expansion in November, although it did not give a figure in its monthly forecast on Tuesday.
Caution around a high-stakes budget vote and the difficult international context are set to slow major investment projects in the euro zone’s second-biggest economy in November, the Bank of France said in its regular survey.
“Industrial order books remain generally low and uncertainty remains high, fuelled by the political situation,” it said.
Drawing on the findings of its monthly survey of around 8,500 businesses conducted from October 29 to November 6, the bank said it expected manufacturing, services and energy to sustain growth in the fourth quarter, while construction activity would slightly extend its decline.
In the third quarter, France’s gross domestic product beat expectations and grew by 0.5%, helped by dynamism in sectors including aerospace and information & communication, while production decreased in the automotive and food industries.
The central bank said the two sectors would see increased activity in November, aided respectively by the reopening of several car plants and preparations for year-end festivities, even as food exports drop due to U.S. tariffs.
Meanwhile, the proportion of companies experiencing recruitment difficulties in October remained steady from the previous month at 17%, with a slight upturn in employment. Selling prices slightly increased in manufacturing and services and continued falling in construction.
(Reporting by Alessandro Parodi; Editing by Benoit Van Overstraeten and Hugh Lawson)
