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French economy grows with surge in business activity as country reopens

The French economy grew twice as fast as expected in the second quarter, the central bank said on Wednesday, as business activity surged after Covid-19 restrictions were lifted.

Published: 8 July 2021 08:21 CEST

French economy grows with surge in business activity as country reopens

The reopening of sectors including hospitality and tourism has provided a boost. Photo: Ludovic Marin/AFP

The Banque de France said that the eurozone’s second-biggest economy expanded by around 1.0 percent from the first three months of the year, while noting that supply bottlenecks and staff shortages had still combined to hobble the recovery.

The bank maintained a 2021 growth forecast of 5.75 percent, expecting activity to withstand the effects of a feared fourth wave of coronavirus infections.

The European Commission has estimated that the French economy will expand by 6.0 percent this year, the same figure floated last week by the national statistics agency Insee.

French authorities have remained a bit more cautious meanwhile, and are sticking for now to a full-year growth forecast of 5.0 percent.

“June was better than companies expected,” central bank general director Olivier Garnier was quoted as saying as he presented its latest monthly survey of company bosses.

Most industrial sectors showed improvement and there were strong advances in commercial sectors, especially among hotels and restaurants, the survey showed.

Several industrial sectors, notably aeronautics and automobiles, were still only at around three-quarters of the level seen before the pandemic however.

Tensions in supply chains and increases in the cost of raw materials were cited as factors holding activity back, especially in the automobile and construction sectors.

Hiring was a problem as well, with 44 percent of business leaders who responded to the bank survey highlighting problems finding qualified staff, in particular for construction and temporary work.

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France's Uyghurs say Xi visit a 'slap' from Macron

Xi is due to make a state visit to France on Monday and Tuesday.

Dilnur Reyhan, the founder of the European Uyghur Institute and a French national, said she and others were “angry” the Chinese leader was visiting.

“For the Uyghur people — and in particular for French Uyghurs — it’s a slap from our president, Emmanuel Macron,” she said, describing the Chinese leader as “the executioner of the Uyghur people”.

Beijing stands accused of incarcerating more than one million Uyghurs and other Muslim minorities in a network of detention facilities across the Xinjiang region.

Campaigners and Uyghurs overseas have said an array of abuses take place inside the facilities, including torture, forced labour, forced sterilisation and political indoctrination.

A UN report last year detailed “credible” evidence of torture, forced medical treatment and sexual or gender-based violence — as well as forced labour — in the region.

But it stopped short of labelling Beijing’s actions a “genocide”, as the United States and some other Western lawmakers have done.

Beijing consistently denies abuses and claims the allegations are part of a deliberate smear campaign to contain its development.

It says it is running vocational training centres in Xinjiang which have helped to combat extremism and enhance development.

Standing beside Reyhan at a press conference in Paris, Gulbahar Haitiwaji, who presented herself as having spent three years in a detention camp, said she was “disappointed”.

“I am asking the president to bring up the issue of the camps with China and to firmly demand they be shut down,” she said.

Human Rights Watch on Friday urged Macron during the visit to “lay out consequences for the Chinese government’s crimes against humanity and deepening repression”.

“Respect for human rights has severely deteriorated under Xi Jinping’s rule,” it said.

“His government has committed crimes against humanity… against Uyghurs and other Turkic Muslims in Xinjiang, adopted draconian legislation that has erased Hong Kong’s freedoms, and intensified repression of government critics across the country.”

“President Macron should make it clear to Xi Jinping that Beijing’s crimes against humanity come with consequences for China’s relations with France,” said Maya Wang, acting China director at Human Rights Watch

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