French growth likely to fall sharply in Q4
Like most analysts, the central bank head says French economy will contract in the fourth quarter and adds that tough times lie ahead of the first half of next year.
PARIS – French economic growth is likely to suffer a sharp fall in the fourth quarter, the head of the central bank warned in an interview published in Le Figaro newspaper on Thursday.
"We are today experiencing a very pronounced slowdown in activity," Christian Noyer told the paper.
"Everything points to the fourth quarter being significantly negative in France and in the eurozone."
France in the third quarter narrowly escaped the recession afflicting several of its eurozone partners, posting growth of 0.1 percent after 0.3 percent in the second.
But most analyses predict that the impact of the global financial crisis will make itself apparent in France in the final three months of the year, with negative effects lingering well into 2009.
"The slowdown is so strong and brutal that it is unlikely that things will get better quickly," Noyer said. "The first half (of 2009) will be rather difficult."
But he added that a "slight rebound" was possible in the second half.
"Strong deflation will boost purchasing power, (European Central Bank) monetary policy will encourage lending and investment and stimulus measures will support activity," he said.
The French government is projecting growth next year limited to 0.2 to 0.5 percent.
[AFP / Expatica]