“France will escape recession”: the governor of the Banque de France nevertheless revises growth downward to 0.3% and is concerned about the boost to the minimum wage

France should escape recession. “This is what we think, we anticipate moderately positive growth in the fourth quarter,” said Emmanuel Moulin, the governor of the Banque de France, on the set of BFM Business this Tuesday. The central bank's growth forecast, initially +0.4%, has however been further revised downwards.

“We will rather be around 0.3% over the whole year,” considers Emmanuel Moulin, after the 0.1% decline in economic activity in the third quarter. “Companies are resisting,” however, notes the governor of the Bank of France. “They are resilient, particularly industrial companies and all companies linked to defense, aeronautics, electricity, electronics, optics.

Market services are rather on the rise but with contrasting situations", observes Emmanuel Moulin, relying on the feedback from the latest economic study. "12% of the population is already on the minimum wage" The governor of the Bank of France, however, believes that the slight decline in the unemployment rate in the third quarter is "good news", even if it rises by 0.4 points over a year. "It is increasing because the economy has been rather gloomy and the international environment is very difficult.

What we must also see is that the unemployment rate remains higher than among our neighbors, which means that we still have progress to make to achieve full employment," insisted Emmanuel Moulin. After the increase in the minimum wage announced Monday by the government, slightly above the level of inflation, the former secretary general of the Élysée referred to the work of the committee of experts on the minimum wage. "I am not sure that we have consulted it, but this committee is rather reluctant to 'nudges' on the minimum wage.

(...) The problem is that 12% of the population is already on minimum wage. Boosts to the minimum wage tend to tighten the salary scale and therefore not allow increases in purchasing power for people paid above the minimum wage.

Asked about the increase in the ceiling of the Livret A, the outstanding amount of which must finance new investments such as nuclear power, Emmanuel Moulin pointed out that the preferred investment was "not the only savings product". “It is a savings that is very liquid, so what we will try to do is rather to have long-term savings to finance businesses, innovation and retirement at the same time. We have instruments like the Retirement Savings Plan, whose outstanding amount is currently 150 billion euros, and which is blocked for several years.

Machine-translated from French