French economy should not suffer any hard landing but recession still possible - ECB's Villeroy

PARIS (Reuters) - The French economy should not suffer any hard landing although a "limited and temporary recession" remains possible, European Central Bank (ECB) member and Bank of France head Francois Villeroy de Galhau said on Thursday.

"The French economy is resisting a bit better than expected," Villeroy told Europe 1 radio.

On Wednesday evening, the Bank of France said the French economy will just manage to eke out positive growth in the final quarter of the year.

The ECB has increased rates by a combined 200 basis points to 1.5% in just three months, its fastest pace of hikes on record. Markets see them peaking at around 3% next year, suggesting that a further series of raises is still coming to tame rapid and broad-based inflation.

Villeroy had also told the Irish Times earlier this week that the ECB must not stop raising interest rates until underlying inflation has clearly peaked, but it may slow the pace of hikes once rates hit a level that starts to restrict growth.

(Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta)