The Paris 2024 Olympics are expected to provide a significant boost to French economic growth in the third quarter, according to a recent survey by the Bank of France. The central bank projects that the country’s GDP will increase by between 0.35% and 0.45%, a notable acceleration from the 0.3% growth recorded in the previous two quarters. This uptick is largely attributed to the influx of revenue from ticket sales and broadcasting rights associated with the Olympic Games. However, the full extent of the economic impact remains to be fully evaluated.
The Bank of France conducted the survey between July 22 and August 5, gathering insights from 8,500 companies across various sectors. The findings also revealed a reduction in business uncertainty, which had surged earlier in the summer due to unexpected legislative elections. Despite this improvement, uncertainty levels in the industry and services sectors remain elevated compared to pre-election levels, following President Emmanuel Macron’s decision to dissolve the National Assembly on June 9.
“It’s still premature to assess the long-term effects of this uncertainty on hiring and investment decisions,” remarked Olivier Garnier, the central bank’s chief economist, during a press briefing on Friday.
The survey followed the legislative elections, which resulted in a hung parliament, leaving no political group with a clear majority to govern. This election outcome fueled concerns among investors about the potential rise to power of parties that might seek to reverse Macron’s pro-business reforms. As of now, President Macron has not yet appointed a new prime minister capable of forming a functional government. He has indicated that this decision will be postponed until after the conclusion of the Olympics, urging different parties to find common ground and collaborate to establish a majority.
Despite the political uncertainty, France—the second-largest economy in the eurozone—entered this period on relatively stable footing. The stronger-than-anticipated growth in the first half of the year has provided a more optimistic outlook for France’s public finances, which have been under strain.
Further bolstering the positive economic news, data from France’s statistics agency, Insee, revealed that the unemployment rate dropped to 7.3% in the three months leading up to June. This figure exceeded economists’ expectations, who had predicted the rate would hold steady at 7.5%. Achieving “full employment” by the end of his second term in 2027 remains a key objective for President Macron.
