French economy to get Olympics boost: central bank

The Olympic rings at Paris’s Eiffel Tower. Photo from Instagram/paris2024

After having expanded by 0.3% in the second quarter, the Banque de France said it expects the French economy to grow by nearly 0.5% in July-September quarter.

The Olympic Games officially opened in late July and the Paralympic Games finish in September.

The central bank put up to 0.25 percentage points of that growth down to the impact of the Games.

Its forecast is broadly in line with that of France’s statistics agency INSEE, which expects a 0.3% point increase in third quarter growth due to the Games, taking overall growth in the quarter to 0.5%.

There was considerable concern ahead of the world’s largest sporting event that it may in fact be a drag on the French economy as many tourists who would normally visit Paris were staying away.

Hotels and airlines like Air France said they had seen a drop in bookings.

The Banque de France said there was still considerable uncertainty about its forecast, with the positive effect from the Games confronting a negative effect from the uncertain political situation after no clear winner emerged from parliamentary elections in June and July.

In any case the economic boost from the Games will be fleeting.

It will “mostly disappear in the fourth quarter,” the central bank’s chief economist, Olivier Garnier, told journalists.