According to the head of France’s central bank, Europe may experience a “limited recession” in 2019 as businesses and families prepare for skyrocketing inflation brought on by the conflict in Ukraine.
Francois Villeroy de Galhau, governor of the Bank of France, issued the warning two days after the French statistics office revised its economic projections downward, projecting zero growth for the final three months of this year.
He stated at a meeting organized by the Eurofi research tank in Prague that “the European and French economy will be faced with a major slowdown next year, and we cannot exclude a short recession.” By comparison to the prior month, industrial production decreased by 1.6 percent in July, according to data released on Friday by the INSEE statistics office.
In the words of ING economists, “the French industrial sector is clearly suffering from the interruption of supply chains owing to the crisis in Ukraine, lockdowns in China, and rising The third quarter has begun on a challenging note for the French economy due to rising energy prices.
It also mentioned how declining purchasing power will have a significant impact on consumer spending and the services sector, which makes up a far larger portion of the French economy.
The question now is how quickly the recession is approaching rather than if France and other European countries are experiencing one, according to ING in a research note.