France’s economy will likely continue to grow at a sluggish pace during Q4 this year, avoiding a recession, according to a survey by the Bank of France.

The central bank’s monthly poll of 8,500 businesses revealed activity progressed in October in the industry and services sectors and was near to stable in construction. The trend is forecast to continue this month, indicating a “very slightly positive” reading for Q4 economic output in the country.

“The French ship is resisting in rough weather and is even a little more solid than expected,” according to Bank of France governor Francois Villeroy de Galhau on Europe 1 radio. “But we need to be extremely vigilant and muster the crew because there is so much uncertainty ahead of us.”

The forecast is relatively optimistic compared to that of economists who predict a recession to begin with a 0.2% contraction in output in Q4, Bloomberg reports.

The central bank governor added that the findings of this latest survey underscore expectations that the country’s economy will avoid a “hard landing.” Villeroy said the poll also indicates there’s no reason to be more negative regarding the outlook than the Bank of France’s September forecasts, which offered several outcomes for next year from a 0.5% contraction to 0.8% growth in output.

Furthermore, the poll shows easing supply restrictions for factories, down to the lowest level since May 2021. Inflationary pressures may start to relax as the number of organisations planning to increase prices fell last month and is forecast to do so again in the industrial sector this month. 

However, the Bank of France survey added that businesses predict the impact on activity from the energy crisis will worsen over the next few months.