Slow and uncertain economic recovery in 2021


Although peacetime is already complicated, economic forecasts are especially acrobatic during the epidemic. However, this is a figure imposed on the predictors of major institutions who have just unveiled the evolutionary scenario of the French economy next year.

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Second brutal confinement

Overall, the forecast measures the actual rebound. The very sharp jumps recorded this summer after the initial imprisonment was lifted suggested a rapid recovery for some time. But this hope was shattered by the resurgence of restrictions and closures imposed by the awakening of the epidemic in November.

Indeed, all indicators show that the second confinement was far less cruel to the economy than the first confinement. The single figure in the latest INSEE note published on Tuesday, December 15th shows a big difference. In April last year, truck traffic plummeted by 60%. It was almost stable in November.

In a broader sense, INSEE has a historical decline in GDP of more than 13%, which was included in the fourth quarter of 2020 (– 4%) and was recorded in the second quarter, although the decline in GDP is real. It is estimated that it is far from the plunge. In total, the recession will reach 9% for the whole year.


“France has eight steps to climb.”

This end of 2020 “deterioration” Entering 2021, it will leave its mark. The situation explained by François Bilroy de Garhow, the governor of the Bank of France, by analogy with the stairs.French economy, he explains “There are eight steps to return to pre-crisis levels. We will have caught up with one step at the end of the first quarter of 2021 and five steps overall in 2021.

Like the Bank of France, which is betting on 5% growth in 2021, INSEE is also seeing the machine gradually restart next year. For the next six months only, the company forecasts growth of 3% in the first quarter and 2% in the second quarter. Given these figures, activity levels at the end of June 2021 are likely to barely return to last summer’s levels and remain three points lower than they were before the crisis.

The numbers may vary, but the possible scenarios vary from institution to institution. Therefore, economists at the French Institute of Economics and Economics (OFCE) predict higher rebounds (7%) in 2021, but show stronger declines (9.5%) in 2020.

Many uncertainties

Economic experts also point out how uncertain their estimates are. Their working hypothesis is a kind of median scenario, where the health crisis doesn’t get worse, but it keeps getting heavier for months. By the second half of 2021, we will be able to return to normal until vaccination is generalized. If the virus were determined otherwise, the prediction would clearly deviate significantly from this central axis.

“The sector most likely to be affected if health deteriorates again is 10% of GDP. That’s important.” Emphasize Julien Pouget, Head of Business Cycle at INSEE.Bank of France, in it “Severe scenario” If it gets worse, we believe growth could be completely flat. And France will still have eight steps to climb.

It is not unclear if the evolution of health has a direct impact on economic conditions. Economists agree to anticipate the impact of Brexit, with or without an agreement. But on the other hand, they point out the possible weights of changes in household behavior.

Record savings

Not only did certain costs (catering, tourism, etc.) become impossible, but great concerns also raised France’s savings rate to record levels. Therefore, by 2020, households should have saved more than 20% of their income compared to the normal 14%. Percentage 5 points higher than usual. The additional amount accumulated by especially wealthy households should reach 90 billion at the end of September and 130 billion at the end of the year.

Obviously, the best thing for the economy is that this storm returns to the economy through consumption. This has not been announced. “Savings are likely to remain slightly higher than they were before the crisis.” I believe in Julian Puget. Starting from the same hypothesis, the Bank of France has not seen French people spend this “cagnotte” in the coming months. On the contrary, it should swell further and peak at € 200 billion at the end of 2021.


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