Paris, March 1 (Reuters) – Inflation in France is more likely to attain its peak within the first half of the yr and, barring a significant world occasion, the danger of recession may very well be dominated out, French European Central Financial institution policymaker Francois Villeroy de Galhau mentioned on Wednesday.
Villeroy, who can also be governor of the French central financial institution, mentioned inflation ought to be again to round 2%, the ECB’s goal, by the top of 2024 to the top of 2025.
In an effort to steer document inflation in direction of its 2% goal, the ECB has hiked charges by a mixed 300 foundation factors to 2.5% since final July and promised to ship an additional 50 basis-point enhance in March.
“After the “dash” of financial normalisation that started in July 2022, we are actually getting into a brand new part of financial coverage that’s extra corresponding to a long-distance race,” Villeroy informed a listening to of the French parliament’s finance committee.
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“Will probably be longer – we should not declare victory too shortly – however extra gradual and extra pragmatic within the tempo of the subsequent hikes,” Villeroy informed French lawmakers.
Whereas it’s too early to inform when charges would attain their peak, Villeroy mentioned it will be “fascinating” by summer season, on the newest by September.
The Financial institution of France will barely increase its development forecast for the French economic system for 2023 on March 20, from a rise of 0.3% forecast in December, earlier than recovering in 2024.
France’s public debt ratio is 20 proportion factors larger than that of the euro space as an entire – 113% of GDP in opposition to 93% in Q3 2022 – and, in contrast to in main international locations of the euro space, isn’t lowering.
Reporting by Marine Strauss
Modifying by Raissa Kasolowsky and Sharon Singleton
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