War in Ukraine: Bruno le Maire trusts the growth of France

After the Banque de France’s announcements about future inflation, Bruno Le Maire is procrastinating. French growth “resists” and remains “solid” despite the war in Ukraine, the Economy Minister assured on Monday, who is nevertheless preparing to revise the government’s forecast of 4% growth this year. The conflict in Ukraine “has a real impact, but what is striking is that French growth is resisting,” said the minister at LCI, considering that “the foundations of French growth are solid.”

At this stage, the government expects 4% growth this year. “Obviously it will be affected by the crisis in Ukraine”, however, judged Bruno Le Maire. “I will revise the growth forecasts as soon as we have a clearer view of what may happen in the energy markets,” he added.

The Banque de France estimated on Sunday that French growth should be cut in 2022 between 0.5 and 1.1 percentage points compared to the increase in gross domestic product (GDP) of 3.9% expected in the absence of conflict. The French GDP will increase from 3.4% if the price of oil is set in Moyenne sur l’année at 93 dollars, more than 2.8% if the price is at 119 dollars, according to the other scenarios established by the central bank French.

The consequences of the Russian invasion of Ukraine will also be felt in prices: the Harmonized Index of Consumer Prices (HICP) should reach 3.7% this year, according to the first scenario, and 4.4% according to the second . This inflation indicator, which allows comparisons at European level and takes into account energy prices more than the national consumer price index (CPI) proposed by INSEE, rose in February to 4.1% per year in France.