France's leading economic index declines in January 2024: TCB

The LEI, a forward-looking indicator designed to forecast future economic activity, has contracted by 1.5 per cent between July 2023 and January 2024. This contraction more than reverses the modest 1 per cent growth observed in the previous six months.

Coincident economic index (CEI) for France, which measures current economic activity, also showed signs of weakness. The CEI declined slightly by 0.1 per cent to 110.9 (2016=100) in January 2024, essentially offsetting a 0.1 per cent increase recorded in December 2023. Despite this, the CEI has grown by a marginal 0.1 per cent from July 2023 to January 2024, which is a slower pace compared to the 0.3 per cent rise seen in the previous six-month period.

“The France LEI fell again in January, marking the seventh consecutive monthly decrease,” said Allen Li, associate economist at The Conference Board. “The January slide was due primarily to a negative contribution from the yield spread, while most other components held relatively steady, and unemployment claims had a mildly positive contribution. Moreover, on a six-month basis, the decline was concentrated on only three out of seven underlying components.  As a result, the January LEI, while still growing well below trend, did not signal an impending recession in France. The Conference Board currently expects real GDP growth for France to remain weak in the first half of 2024 and only reach 0.7 per cent annual growth in 2024 after, 0.9 per cent in 2023.”

Fibre2Fashion News Desk (DP)