The Bank of France cut Tuesday its economic growth forecast down to 0.3 percent for the final three months of the year, Reuters reported. France’s economy has been hit by a decline in hotel, leisure and restaurant bookings following the Paris terror attacks last month that left 130 people dead and more than 350 injured. The Bank of France had originally estimated 0.4 percent growth for the fourth quarter.
France’s tourism sector accounts for approximately 7.3 percent of the country’s gross domestic product. Bookings have fallen for the country’s largest hotel chain, Accor Hotels, which expects lower demand to last for as long as four months. Paris’s tourism office said it expects recovery after the November attacks to take longer than the January Charlie Hebdo shootings that left 12 dead.
"Activity in services rose at a more moderate pace than in previous months," the bank said in its statement.
Morale in the service sector also fell to 96 from 97 in October, the bank release showed. The industrial sector also showed a sentiment drop to 98 from 99 in October, but experts said they expected to see a slight rise during December.
France’s aviation industry has also been affected by the attacks. Major carrier Air France-KLM reported losses of $54 million in November following the Paris attacks, the Wall Street Journal reported Tuesday. The company said it expects to see losses in December as well.
“The impact was pretty much concentrated on the local traffic to and from Paris,” said Chief Financial Officer Pierre-Francois Riolacci.
The economic news comes only days after regional elections. Marine Le Pen's far-right National Front won 27.7 percent of the vote compared with President François Hollande's coalition with just over 23 percent. The National Front has campaigned on the lack of new job creation under Hollande's administration. Hollande has made job creation a key part of his re-election in 2017, but French unemployment is at its highest level in 18 years, Bloomberg reported.