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France: Bank Lending Survey Shows More Weakness

ByThe National Bank of Canada
Published 06/14/2012, 10:03 AM
Updated 05/14/2017, 06:45 AM

Earlier this year, l’Institut National de la Satistique was forecasting GDP in France to be flat in Q1 and to reaccelerate modestly in the second quarter (+0.2%) with job creation, consumption and investment expected to grow at a modest pace. Although the Institute’s forecast was right on the mark for the first quarter, with France’s GDP flat in Q1, data published so far for the second quarter are not encouraging. Manufacturing production fell 0.7% in April. Moreover, both surveys of services and manufacturing purchasing managers were quite weak in May (45.1 and 44.7 respectively) suggesting further weakness to come.

Bank of France’s monthly banking survey published earlier this week was certainly no confidence builder either. According to the survey, 70.6% of senior loan officers reported weaker credit demand from corporations in May. Only 3.2% reported stronger demand, for a net reading of minus 67.4. This marks a significant deterioration from April when the net reading came in at minus 52.8. The situation is even worst in regards to credit demand for housing with a net reading of minus 97.5. At the same time consumption loan demand is further deteriorating.
France Bank lending survey shows more weakness

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