According to Bloomberg, business activity in the private sector in France declined less than expected, as an increase in manufacturing was not enough to offset ongoing political uncertainties.

S&P Global’s Composite Purchasing Managers’ Index for March rose to 47, up from 45.1 in February, but still indicating a contraction below the 50 threshold. Economists had predicted a smaller improvement to 46.1.

An economist at Hamburg Commercial Bank, Tariq Kamal Chaudhry, noted that France's economy is struggling to gain momentum due to persistent uncertainty about future economic policies despite some political stability.

France, the eurozone's second-largest economy, has been facing challenges from various fronts, such as concerns over US President Donald Trump's tariff threats impacting Europe and political upheavals surrounding the delayed budget this year.

Recent data from the Bank of France and Insee have lowered growth outlooks and assessments, while credit rating agency DBRS Morningstar downgraded France's AA(high) rating outlook to negative, citing risks related to reducing the fiscal deficit and high public debt.

Manufacturers in France saw a significant improvement compared to the previous month, surpassing expectations, while the services sector saw a slight increase. However, a recent survey showed a decline in optimism among factories but an improvement in retail, with stability in the services sector.

Purchasing Managers' Index (PMI) data are important as they provide early insights into economic trends and shifts. Though they show changes in output breadth rather than depth, they are instrumental in indicating economic direction. PMIs for Germany and the Eurozone are expected to be released later in the day.

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