Inflation in France is likely to peak in the first half of the year barring major world events. A recession can therefore be ruled out, French European Central Bank policymaker Francois Villeroy de Galhau said on Wednesday.
Villeroy, who is also France's central bank governor, said inflation should return to around 2%, the ECB's target, by late 2024 to late 2025.
In an effort to steer record inflation towards its 2% target, the ECB has raised rates by 300 basis points to 2.5% since last July and promised to deliver another 50 basis point hike in March.
"After the aggressive monetary tightening policy that started in July 2022, we are now entering a new phase of monetary policy that is more like a long-distance race," said Villeroy.
"It will be longer but we cannot claim victory too soon. But it will be more gradual and more pragmatic in the next rate of increase," said Villeroy to the French parliamentarian.
While it is too early to say when rates will peak, Villeroy said it would be "desired" by summer, September at the latest.
The Bank of France will slightly raise its growth forecast for the French economy for 2023 on March 20, from the 0.3% increase it forecast in December, before recovering in 2024.
France's public debt ratio is 20 percentage points higher than the euro area as a whole at 113% of GDP compared to 93% in Q3 2022 and it is unlike in the main countries of the european area, not decreasing.
