French Q3 growth set to reach at least 0.35% on Olympic boost, cenbank says By Reuters

PARIS (Reuters) – The French economy is on course to grow at least 0.35% in the third quarter as it benefits from a temporary boost from activity related to the Olympic Games, the central bank estimated on Friday.

The central bank forecast underlying growth in the euro zone’s second-biggest economy of 0.1%-0.2% for this quarter from the previous three months, when it expanded 0.3% on a quarterly basis.

The Olympic Games would add another quarter percentage point of growth through temporarily higher activity in hotels, restaurants and other businesses providing services impacted by the games.

Payments card company Visa (NYSE:) said earlier this week its data showed that small businesses in Paris reported a 26% rise in sales to cardholders during the first weekend alone of the Olympic Games compared with a year earlier.

France’s central bank based its growth estimates on findings from its monthly business sentiment survey of 8,500 firms, which showed service sector companies expecting activity to pick up this month after weak activity in July with summer tourists staying away before the Olympics had started.

Executives also reported slow industrial activity in July, but expected it to accelerate in August, while the construction sector expected an August slowdown after a firm July.

The survey found businesses’ uncertainty about the outlook eased somewhat in July after snap parliamentary elections in June and early July triggered a surge in uncertainty.

The election, which President Emmanuel Macron called after his party was trounced in an early June EU parliament election, produced a hung parliament.

Macron has said he would choose a new prime minister after the Olympic Games and the left-wing New Popular Front is jockeying hard to secure the post.