'Yellow Vest' protests blamed for cut in French growth forecast
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French economic growth is set grind to a near-standstill in the final quarter, the central bank estimated on Monday, citing the impact of the "Yellow Vest" protests that have rocked the country.
The Bank of France said the Eurozone’s second-biggest economy would eke out growth of only 0.2% in the three months to December, down from 0.4% in a previous estimate and from that rate in the third quarter.
"Services activity has slowed under the impact of the movement. Transport, the restaurant and auto repair sectors have gone backwards," the bank said in its latest company survey.
The forecast is well short of the 0.8% that would be needed to meet the government's 2018 growth target of 1.7%.
Earlier on Monday, Finance Minister Bruno Le Maire said he expected the protests to cut quarterly growth by 0.1%, though he refused to comment on a possible downward revision of the full-year 1.7% figure.
"I am not going to revise the figures for the moment but we will certainly have 0.1 percentage point less growth at the end of this year," Le Maire said.
"That cannot be made up. That is the reality – for commerce, small business owners who have seen their shops damaged, vandalised, looted," he added.
The finance minister on Sunday visited shops in Paris hit by looting during anti-government riots a day earlier, describing the protests sweeping France as a “catastrophe for our economy”.
The retail sector has been left reeling after protestors rampaged through central Paris on key pre-holiday shopping days. French retail federation estimated the sector had lost out on about 1 billion euros in revenue.
All eyes on Macron
The "Yellow Vest" revolt was inspired by planned fuel tax hikes – now scrapped – that protestors said would add to the cost of living at a time of weak wage growth.
Named after the fluorescent safety vests that all French motorists must carry in their cars, the movement's protests have triggered some of the worst unrest seen in the capital since the 1968 student riots.
French President Emmanuel Macron is expected to offer fresh concessions to try to placate protesters in a closely watched address on Monday.
But the former investment banker, who has struggled to shake off his reputation as a “president of the rich”, is unlikely to rescind his repeal of a wealth tax on high earners, a particular source of protesters' ire.
Meanwhile, Labour Minister Muriel Penicaud has rejected the idea of an increase in the minimum wage – another demand from many protesters who say they are barely scraping by.
(FRANCE 24 with AFP, REUTERS)