Despite Omicron, the French economy is resisting, guaranteeing the Bank of France

France’s economic activity is countering the wave of Omicron variants while the World Bank is lowering its forecasts for the world economy. According to the Bank of France, activity should stabilize in January, despite fears of business disruption due to increased pollution and a surge in absenteeism due to contact incidents.

“For now, supply and recruitment difficulties have replaced the problem of absenteeism,” said Helene Tanguy, head of research at the Bank of France, this Tuesday.

Omicron, inflation … World Bank darkens 2022 economic forecasts

The growth rate for the fourth quarter of 2021 was 0.6% compared to the third quarter, but we confirmed that the gross domestic product is expected to increase by 6.7% for the whole year, but the bank’s gross domestic product (GDP) is January, like December, is 0.75% above pre-crisis levels. Expectations for stable activity in January are compatible with the 2022 central forecast scenario, “she adds. So this year’s growth forecast is 3.6%. The forecast released when the central bank lowered the forecast by 0.1 points is lower than this. That forecast by the government, which maintains the 4% forecast for the time being.

“Less impact” according to Bruno Le Mer

As Omicron variants dominate all over France, new restrictions imposed by the government to curb epidemics will have a “weak impact” on growth. “Omicron will obviously disrupt our social life in January, but we have taken the necessary steps to avoid economic disruption. I am very confident in the growth of France. “He said.

Omicron dominates France: “less impact on growth” guaranteed by Bruno Le Maire

Contrasting results

Despite the surge in pollution cases, the fifth wave of COVID-19, where the government has applied new health restrictions, will yield different results across sectors, business studies identify. .. Therefore, January activity is expected to rise very slightly in the industry, construction is stable and business services are important, but some service activities such as hotels, restaurants and events are expected to decline sharply.

Central bank Secretary Olivier Garnier said in a press conference in January that “in the same industry as the construction industry, there are far more orders left than historical averages.”

Nonetheless, he said, not only in the automotive industry, but also in IT and electronics, “decreased activity not directly due to omicron waves, but due to persistent supply difficulties, especially in the semiconductor field.” He said he was expecting. .. Regarding services, the economic report reports that accommodation, catering and events are “health-related sharp deterioration”, as opposed to “the direction of temporary work and business services is strong”. Because of this, we anticipate a slight decline in activity. context”.

Therefore, for accommodation, activity should be 64% of pre-crisis levels at the beginning of the year, compared to 80% for the fourth quarter of 2021, but for catering, 85% to 75% at the same time. A December survey showed an increase in both industry and services, and, to a lesser extent, an increase in construction. In industry, capacity utilization in November and December was higher than the 15-year average in all sectors except automotive and aviation.

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Omicron can turn Covid into endemic

Outbreaks of Omicron variants could turn Covid-19 into an endemic disease in which the world can live, health officials in the United States and Europe said Tuesday. “As the immunity of the population grows, and in Omicron there will be more innate immunity in addition to vaccination. We will quickly move to a near-epidemic scenario,” Marco said. EMA, the European Medicines Agency based in Amsterdam. In the United States, which set a new record for about 146,000 inpatients on Tuesday, White House adviser Anthony Fauci on the Health Crisis also hinted at a time of “transition.” ” virus.

“As Omicron goes up and down, hopefully the situation will arise with a combination of good background immunity and the ability to treat people at risk,” he said. “We are not at the stage of’living together'(…) in an acceptable way, but I think we will get there.”

The World Bank warned on Tuesday, especially as global growth slowed this year and the effects of Omicron could not rule out the worst-case scenario.

Omicron, inflation … World Bank darkens 2022 economic forecasts