French Economy Fueled by Olympic Games Boost

The French economy is projected to grow by 0.35% in the third quarter, primarily driven by the activities related to the Olympic Games. The central bank's estimates are derived from a business sentiment survey of 8,500 firms. Notably, small businesses in Paris saw a 26% rise in sales during the first weekend of the Olympics.

The French economy is projected to grow by at least 0.35% in the third quarter, thanks to a temporary boost from Olympic Games-related activities, according to the central bank's estimates released on Friday.

The central bank forecasts underlying growth for the euro zone's second-largest economy at 0.1%-0.2% for this quarter, building on the 0.3% growth from the previous quarter. The Olympics are expected to contribute an additional quarter percentage point to the GDP through increased activity in services like hotels and restaurants.

Data from payments card company Visa showed a 26% sales increase among Paris small businesses during the first weekend of the Olympics compared to last year. The central bank's projections are based on its monthly business sentiment survey of 8,500 firms, indicating a pick-up in service sector activity this month after subdued performance in July. Similarly, industrial activity is expected to accelerate in August following a slow July, while the construction sector anticipates a slowdown after a robust July.

Businesses reported reduced uncertainty following snap parliamentary elections in July, which led to a hung parliament. President Emmanuel Macron has announced his intention to appoint a new prime minister post-Olympics, with the left-wing New Popular Front vying for the position.

(With inputs from agencies.)