French central bank sees fourth quarter growth of at least 0.2%

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Aerospace, defence sectors drove December industrial activity

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Services sector expected to strengthen in January

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Uncertainty indicator declines despite budget impasse

PARIS, Jan 13 (Reuters) - France's economy probably grew modestly in the final quarter of last year, with aerospace ?and defence sectors driving December momentum despite political uncertainty, the Bank of France said ?in its latest business sentiment survey

The euro zone's second-biggest economy likely ?grew "at least" 0.2% in the fourth quarter from ?the third ?quarter when it grew 0.5%, the central bank said, leaving its estimate unchanged.

Its monthly survey, ?which polled executives from roughly 8,500 ?companies between December 22 and January 7, showed economic activity continued to advance in December, though ?at a slightly slower pace than ?in November.

Aerospace ?and defence-related sectors fuelled robust growth in the industrial sector, while services posted more moderate gains. Construction activity remained ?largely flat, the survey found.

However, the outlook for January signals a shift in momentum. Industrial activity is expected to slow, linked to slower aerospace production, limited visibility on order books, and heightened uncertainty. By contrast, service-sector firms anticipate stronger activity, at a ?pace ?closer to the average of the past decade.

In construction, activity is forecast to remain broadly unchanged, with finishing work ?continuing to outperform structural work.

The central bank's monthly uncertainty indicator declined again across all three major sectors but remains at elevated levels, reflecting ongoing concerns about France's 2026 budget.

Lawmakers failed to pass a 2026 budget by the end of last year, requiring emergency stop-gap legislation to ?be passed. They resumed their review of the 2026 budget on Tuesday, but many say that the government will need to bypass parliament with special constitutional powers ?to get it passed. (Reporting by Leigh Thomas; Editing by Alison Williams)