After INSEE, which estimated that the shock caused by the coronavirus epidemic on March 26 would bring about 3 points of GDP annually to France, OFCE, the Economic Research Center of Sciences-Po, announced on Monday, March 30. Health crisis activities and employment, and the containment measures it imposes. “It’s a shock that everything we know has no common means.”, Its president, Xavier Lagot, insisted. Proof of three important numbers.
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► 30 points of GDP lost per month
OFCE estimates that the containment measures imposed to stave off the epidemic will cost more than 30 points of monthly GDP, or 2.6% annually, which is 60 billion wealth per month of containment. Equivalent to the loss of.
This shock ” Pretty “ Through the decline in household consumption, it is sent primarily through the demand channel, but it also sends a decline in investment, especially in the construction sector, due to the outage of many construction sites. In addition to this, the impact of the crisis on foreign and domestic tourism needs to be added. The loss can be about $ 14 billion a month due to confinement and border closures.
Supply shocks are due to the difficulty of companies continuing their activities. Many have been forced to shut down by government orders, and others are facing labor shortages for a variety of reasons-sick employees, on vacation for childcare, or exercising their right to withdraw. It is disrupting production.
If the crisis lasts for more than a month, we still don’t know how much the bill will go up. “Is two months double? It’s hard to say for now. It may have a snowball effect that makes things worse, but there are also agents’ adaptations that mitigate the effects and negative effects of public policy.”Emphasizes OFCE’s director, Xavier Timbeau.
► 18% reduction in household consumption
OFCE calculates that the direct impact of a month’s imprisonment could reduce real household consumption by 18%. In detail, of the 17 branches surveyed, 7 are concentrated in about 80% of shocks, especially those related to transportation services, accommodation and catering, construction and leisure activities.
“On the other hand, the seven branches should be largely unaffected by the current confinement.”, Watch out for research. These are especially those in agriculture and the agricultural food industry, housing energy consumption, financial activity and insurance. Some people, such as the IT and telecommunications departments, want to withdraw from the game.
► 5.7 million jobs that may be affected by partial unemployment
Decreased demand and slowing or stopping activities can bring significant reliance on short-term work, ultimately affecting 5.7 million people, or 21% of office workers.
In this hypothesis, considering that all demands are accepted by Unédic, the direct cost of finance is 12.7 billion euros per month, to which a loss of social contribution of 8.7 billion euros needs to be added. “One of the total budget costs that could exceed € 20 billion per month”The author says.
Presented study “It’s just the first step in quantifying unprecedented economic and social shocks.” Xavier Timbo says. therefore, “Integrates effects not considered at this stage and is regularly revised based on new data available.”He agrees.
But one certainty is already in shape. The French scenario of returning to growth, continued unemployment and managing the public deficit seems to be seriously undermined.