Introducing the French government’s 2023 budget, Finance Minister Bruno Le Maire warned on Monday that inflation will remain high, reaching around 6 percent in the coming months and expected to decline to around 4 percent in 2023.
“We expect inflation to remain high for the next few months, around 6%, before decelerating, as we have said repeatedly, to around 4% in 2023.” In this context, I would like to emphasize that the French economy is against this”, said the minister. The situation is very important, especially in terms of growth, which is expected to reach 2.7% in 2022. We expect growth to improve to 1% in 2023.
France, like other EU countries, is experiencing a difficult economic situation due to the sharp rise in energy prices and the sharp rise in the cost of living, which has weakened demand and reduced manufacturing output. Inflation in the euro zone rose to 9.1 percent in August, the highest on record, as analysts expect it to hit double digits by the end of the year.
The European Central Bank raised interest rates by a record 75 basis points this month, pledging to do everything in its power to contain rising consumer prices.
“There is an impasse in the eurozone as companies report worse business conditions and higher prices linked to higher energy costs,” said Chris Williamson, chief business economist at Standard & Poor’s Global Market Intelligence. Williamson adds that indicators point to a contraction in the eurozone of 0.1 percent in the third quarter of 2022 and a sharp drop in the fourth quarter, noting that “the challenge for the authorities is to contain inflation and avoid a sharp slowdown in the economy. ” That’s why it’s getting harder and harder.”
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