In a recent report, Melanie Debono, an economist at Pantheon Macroeconomics, has stated that due to a further decline in service sector output in August, the contraction of the French economy in the current quarter of this year could exceed initial expectations.
Data released on Wednesday showed that France’s composite PMI for August maintained its contractionary pace, with a slight improvement in manufacturing output being offset by a significant decline in the service sector.
Debono also noted that input prices in the service sector continue to rise, leading to consumer price increases, indicating that inflationary pressures within the service industry are still elevated.
This suggests that France’s GDP for the third quarter could contract by 0.5%, a decline larger than previously anticipated.
