France Boasts A Big Economic Boost After Paris Olympics Championship

France’s economy has gotten a lift from the 2024 Paris Olympics in the second from last quarter, as per the Bank of France. However, political uncertainty keeps on burdening its securities exchanges.

The Olympics reached a conclusion on Sunday August 12, and without doubt, the economy of France brags to have gotten a major lift from the convergence of guests and increased spending in areas like hotels, restaurants, and museums, according to France’s Tourism Minister, Olivia Grégoire.

According to Gregoire, tourism-related sales at museums and restaurants saw a 25% increase year-over-year, while hotel spending in France’s cities increased by 16% from the previous year.

According to a number of surveys, the Paris Olympics are expected to significantly boost the French economy in the third quarter, outweighing the political ambiguities that surfaced toward the end of June.

The Banque de France expects economic growth somewhere in the range of 0.35% and 0.45% for the second from last quarter, compared with a 0.3% increment in the first two quarters.

This suggests that the Olympics could account for up to 0.25 percent of the growth, with ticket sales and TV rights accounting for the majority of the economic benefits.

The INSEE national statistics institute also predicted in July that the Olympics would contribute 0.3 percent to the growth of the French economy in the September quarter, potentially bringing growth to 0.5 percent overall.

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Also, Visa data showed that visitors spending increased by over 20% during the first few days of the Olympics compared to the earlier year, with foreign Olympics-related spending flooding by 29%.

Nonetheless, the full effect of these increases remains dubious because of progressing political challenges, according to Olivier Garnier, the chief economist at the Banque de France.

Meanwhile, recent economic data indicates that France has made positive strides in key areas, with the unemployment rate dropping to 7.3% in the second quarter, down from 7.5% in the previous quarter, marking the lowest level since the third quarter of 2023.

Additionally, annual inflation edged up to 2.3% in July from June, slightly below estimates of 2.4%. Although energy prices saw an acceleration, the increase in service prices softened. These developments are seen as positive for Europe’s second-largest economy, despite ongoing political uncertainties likely to weigh on sentiment.

As per the Banque de France, business uncertainty in the second from last quarter has facilitated to its most minimal level since the last quarter of 2023, following a spike because of the snap political race.

Due to ongoing political uncertainty, the French stock markets remain bearish despite signs of economic improvement.

Concerns regarding potential political shifts and their impact on public finance have particularly affected the banking industry in France. French luxury consumer stocks have also struggled, as the global economic slowdown has dampened consumer spending, especially in China. The recent global market selloffs have further pressured French stocks.

credit: euronews