As a result of a more dynamic recovery than expected, the government raised its 2021 growth forecast to 6.25% on Monday, October 11 (previously 6%). This was in line with the forecasts of the most major institutions.
“Growth is strong, solid and dynamic. Therefore, we will revise our 2021 growth forecast from 6% to 6.25%. In December 2021, we will return to pre-crisis activity levels.”Announced the Minister of Economy and Finance Bruno Le Mer to the Diet. The agent began a final budget survey there on Monday afternoon.
Therefore, the government is, of course, in line with INSEE’s forecasts, approaching the Organization for Economic Co-operation and Development and the Bank of France (6.3% each) announced in September.At the point of economic conditions announced on Monday, the Bank of France has been active. “It will be almost 100% of the pre-crisis level in October.”..
Unemployment rate can drop to 7.6%
This recovery of the French economy occurred after the historic recession of the 2020 health crisis, reducing gross domestic product by 8%.The government ” Note “ So far, the success of the vaccination campaign and the implementation of this summer’s health pass have not had a significant impact on activities, but now their ambitions can be slightly modified.
After the start to 2021 was delayed, the activity recovered strongly after mid-May due to the maintenance of health restrictions. According to economists and the government, it should now return to end-2019 levels by the end of the year.In addition to the mechanical rebound due to the resumption of many activities, Bruno Le Mer also sees success in it. “Economic policy” Government support measures for recovery plans, including pre-crisis economic choices.
A sign widely advocated by executives over the last few weeks: Employment is at an unprecedented level. The unemployment rate in the third quarter could drop to 7.6%, a level not seen since the 2008 financial crisis.
New investment under the France 2030 plan
While health risks seem to be receding so far, Bruno Le Maire has identified three new dangers to the French economy, including the risk of conflict. “Worse” Between nations that need to be guided to rebuild France and Europe “Independence”, Especially for industrial use. With this in mind on Tuesday, Emmanuel Macron launched an investment program called “France 2030” aimed at funding the development of technology and promising sectors (hydrogen, biotechnology, space, nuclear power, etc.). I will present it.
Another risk pointed out by the Minister of Economy is inflation, the surge caused by energy prices, affecting the purchasing power of French people, making it increasingly difficult to hire in certain numbers of sectors. Such). “Full employment, can be achieved within 2 years”Six months before the presidential election, he confirmed Bruno Le Mer in front of lawmakers in a campaign-accented speech.
He also defended the seriousness of the government’s budget, despite the explosion of public debt and deficits during the crisis. The latter was expected to be 4.8% of GDP next year (after 8.4% this year), but should eventually be around 5%. The government still has to take into account the costs generated by France’s 2030 plan, future promised income promised to young people struggling to achieve, and compensation measures in the face of rising energy prices. Must be.