London(CNN) Attacks on the Paris offices of multi-billion dollar corporations earlier this month by protesters angry about pension reforms may have tarnished France’s image as a place to do business.
But behind the tumult, Europe’s second-largest economy has shown striking resilience since the pandemic, and is becoming an increasingly attractive destination for businesses and investors looking to expand or establish a foothold in the region.
France’s economy grew 0.2% in the first quarter of this year, its national statistics agency said Friday, after stagnating in the previous quarter. Across the 20 countries that use the euro currency, gross domestic product was weaker, ticking up just 0.1% over the same period.
It’s welcome news for France in a year so far marked by million-strong protests and strikes that have brought parts of the country to a standstill. Unions are demanding the government repeal the law that will raise the retirement age from 62 to 64.
A protester lights a flare as railway workers demonstrate a few days after the government pushed its pension reforms through parliament without a vote.
More industrial action is planned for May 1. Yet the long-running protests are unlikely to leave a lasting dent in France’s economy, according to Charlotte de Montpellier, a senior economist at Dutch bank ING.
“Previous experiences of social tensions in France show that the economic impact is generally temporary and fully compensated by a rebound in activity in the following months,” she wrote in a note in March.
Manufacturing output rose 0.7% in the first three months of the year, official statistics showed Friday. Production at oil refineries surged by more than 13% after falling 11.4% in the previous quarter, when their staff went on strike over pay.
Resilience
This year’s mass protests are just the latest in a succession of crises that have hit France since 2020. But its $2.8 trillion economy has held up comparatively well.
The International Monetary Fund forecasts that the French economy will grow 0.7% in 2023 while its closest peers, Germany and the United Kingdom, are expected to shrink.
In a report in February, the IMF said France had enjoyed a “strong economic recovery from the pandemic,” adding that its more “limited reliance” on Russia’s natural gas had helped keep inflation below price rises in other European countries more dependent on Moscow for energy supplies.
As in other economies, inflation in France has hit multi-decade highs in recent months — pushing some of its smaller businesses toward breaking point — but price rises peaked at a lower level than the euro zone average. Consumer price inflation in France averaged 5.9% last year, compared with 9.2% for the European Union.
A customer shops at an outdoor fruit and vegetable market in Toulouse, southwestern France, on March 5,…
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