PARIS — The French economy is on course to grow about 0.5% in the first quarter, with activity broadly holding up despite the latest wave of COVID-19 hitting the country, the central bank said on Thursday.
That would be slightly slower than the 0.7% quarterly growth seen in the fourth quarter on 2021 but was more optimistic than the 0.3% that the INSEE national statistics agency forecast earlier this week.
The Bank of France based its estimate on feedback from 8,500 companies covered by its monthly business climate survey, in which industrial and constriction firms reported a very slight improvement in activity in January.
Business in the service sector held up better although conditions varied widely, with hotels and restaurants suffering in the face of France’s fifth wave of COVID-19 as the highly contagious Omicron variant became the dominant strain.
Looking to February, business was seen picking up in the industrial and service sectors while remaining largely stable in construction, the survey found.
About three-fourths of industrial and construction firms expected current supply-chain problems to last for a year, putting pressure on prices.
Meanwhile, the share of firms reporting staffing difficulties remained unchanged at 52% with the proportion as high as 61% in the construction sector. (Reporting by Leigh Thomas, Editing by Timothy Heritage)