(Bloomberg) -- France’s economy will avoid a recession thanks to the services sector, according to a central bank survey.

Gross domestic product will expand 0.1% in the fourth quarter, after a 0.1% contraction in the previous three months, the Bank of France said on Monday. This is slightly less optimistic than a 0.1% to 0.2% range it gave on Nov. 8.

The monthly survey of around 8,500 business leaders indicated a further easing of inflationary pressures, with raw material costs down and the prices of finished products almost stable, according to manufacturers. The portion of firms raising prices has stabilized close to pre-Covid levels.

“Activity is resisting in the fourth quarter thanks to services,” Bank of France Chief Economist Olivier Garnier said. “The normalization trend in terms of price-setting behavior by companies is being confirmed month after month.”

The institution plans to publish GDP through 2026 next Monday — just after the European Central Bank publishes its own estimates later this week.

The prospect of slight expansion in the euro area’s second-biggest economy contrasts with expectations of consecutive quarterly contractions in neighboring Germany, whose manufacturing slump is seen dragging the currency bloc into recession, according to a Bloomberg poll.

The Bank of France survey may still give some reassurance to the ECB that it’s making progress in bringing down inflation through higher borrowing costs without inflicting severe economic damage. Policymakers are due to announce their final interest-rate decision of 2023 on Thursday.

Recruitment difficulties remain high in France, meanwhile, with 45% of companies affected, slightly more than a month earlier, according to the Bank of France. Order books are continuing to worsen in industry, especially in building construction.

©2023 Bloomberg L.P.