The euro zone's second-biggest economy is set to see
quarter-on-quarter growth of 0.2% in both the first and second
quarters, up from 0.1% growth in the final three months of last
year, INSEE said in its outlook for the first half of 2023.
INSEE chief economist Julien Pouget said that meant the
economy would need growth of about 0.4% in the two final
quarters of 2023 to achieve the 1% annual growth that the
government forecast in its budget.
In December INSEE had forecast the economy would grow 0.1%
in the first quarter followed by 0.3% in the second quarter.
INSEE said in its latest update that the outlook also
depended on how long a series of strikes over pension reforms
lasted. On Tuesday France saw the third day of strike action in
public transport, the energy sector and some schools since the
government presented its pension reform plans on Jan. 10.
Pouget said that a series of large-scale strikes in 1995
over several weeks had cost the economy only 0.2 percentage
points of growth and "at most" that much in 2019 during a series
of strikes then, also over pension reform.
Turning to inflation, INSEE said that the annual rate was
seen slowing from 6.0% in January to 5.0% by June as energy
price pressure would ease after a 15% increase in regulated
power prices in February.
Food prices would become a bigger driver of inflation
pressure than energy prices, keeping underlying inflation, which
excludes volatile prices like energy, high at or near 5.7%
through the first half of 2023.
INSEE is a government agency but its forecasts are
independent.
(Reporting by Leigh Thomas; Editing by Susan Fenton)
PARIS, Feb 7 (Reuters) - France's economy is on course
for marginal growth in the first half of this year, the INSEE
statistics agency said on Tuesday, adding that whether strikes
over pension reforms have an impact on growth will depend on how
long they last.
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