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France Business Confidence March 2022

France: Business confidence records lowest reading since April 2021 but remains in positive territory in March

Business confidence fell to 106.1 in March from February’s 112.3. March’s result marked the weakest sentiment since April 2021. Nevertheless, the index remained above the 100-threshold, separating optimism from pessimism among businesses.

March’s lower reading was largely attributed to falling optimism regarding the general business outlook, as well as a marked decline in expectations for demand and activity. That said, the feeling of economic uncertainty improved among businesses managers.

Going forward, the ongoing Russian invasion of Ukraine is expected to take a further toll on the business climate, although the extent is somewhat uncertain. Charlotte de Montpellier, economist at ING, noted that:

“One can conclude from these indicators that the economic outlook has worsened, but not by much. Unfortunately, this is probably only the first step, and more deterioration is to be expected in the coming months if the war continues. With inflation expected to average over 4% for the year, production lines severely disrupted and confidence hit, economic activity in France will be severely impacted by the war in Ukraine.”

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