What is France’s economic recovery this summer, “no matter what the cost?”

“I’m not optimistic!” At the end of May, Charles Perez, manager of Brasserie Dubillot in the 2nd arrondissement of Paris, smiles. I must say that he is more related to him than good news. Since the reopening of the terrace, we have received feedback from our customers despite the bad weather. “The pandemic is there. Parisians are very happy to be back in the restaurant. Even if things settle down a little after the euphoria of the first day, the recovery is there.”

As a result, he needs to open a second facility immediately, thanks to the loan he got just before the Covid epidemic. Despite sector tensions, he had no problems hiring staff. Even next year’s repayment of his loan guaranteed by the state (PGE) will not scare him! “Thanks to digitalization, we were even able to take advantage of the closing period to improve our offers and internal processes,” he concludes.

After a few months of darkness, the sun is finally shining! That’s it, like Charles Perez. Thousands of entrepreneurs are seeing the end of the tunnel, the end of the Covid epidemic, and the long-awaited economic recovery. The government firmly believes that and expects 5% growth this year. “The next step will guide us together to define a new model of growth and prosperity,” Emmanuel Macron was enthusiastic at the beginning of May. “As soon as we lift our health restrictions, France will be amazed at the vitality of its growth,” added Bruno Le Mer, Minister of Economy, who we haven’t heard much at parties.

The various predictive organizations are even more optimistic. European Commission experts forecast our growth rate to be 5.7% this year, the IMF (International Monetary Fund) forecast an increase in GDP to 5.8%, and the OECD will raise the cap. Up to 5.9%. “We expect a very strong recovery from June to September. We expect 6% growth this year and the extent of the rebound can be astonishing,” said Christophe Barraud, Chief Economist at Market Securities. I am analyzing.

I have to say that the good news has been piled up for several weeks. The first is clearly the evolution of health. The end of the crisis seems to be finally approaching, thanks to vaccination campaigns and the gradual removal of health restrictions. And thanks to the latest government announcements, we were able to contain the “fourth wave” of delta variants. “During the previous lifting of restrictions, we were able to observe the ability of the French economy to recover as soon as health measures were relaxed,” said Hélène Baudchon, an economist at BNP Paribas. Growth actually recovered dramatically last year during the first delimitation (+ 18% in the third quarter of 2020)! Indeed, in 2021, the rebounds will be less pronounced, but again, they should experience a very rapid recovery, just because they are not completely shut down as they were in the spring of 2020.

>> To read again-French recovery plan verified by Brussels

Despite the intensity of the turmoil that has fallen on our country, the emergency measures taken by the government since the beginning of the epidemic have, in fact, significantly mitigated the shocks of various economic agents. “Whatever you need” worked very well. It limited economic and social collapse, but the Covid crisis was three times the subprime crisis, “said Mathieu Plane, Deputy Director of Analysis and Prediction at the French Institute of Economic Research. Observatory (OFCE). Thanks to the aid system, the purchasing power of the French people has not declined this year and has accumulated considerable savings as it cannot be consumed (OFCE calculates that 160 billion euros are secured in 2020 and 2021. ).

Companies that use short-term work and multiple grants are also holding up very well. Of course, this analysis remains global. Some households are seeing things getting worse, and many companies are currently facing great difficulty. “But from a macroeconomic point of view, French people have savings and businesses are on track,” said Patrick Altus, chief economist at Natixis. The possibility of recovery is there. “Investments have held up very well, surpassing GDP in the first quarter,” adds Charles-Henri Colombier, Rexecode’s Director of Economics.

Proving this is Bruno Grandjean, the leader of the Redex group of machine tools, whose activities depend on the investment cycle of the company. “We are in the process of reaching historic levels!” And if consumption was still a bit shy when non-essential stores reopened, experts are hoping for a bright future. “In countries that are a little more advanced than us in deregulation, consumption has exploded,” said Christoph Barrow.

Therefore, with the removal of certain health measures and the recovery of future self-confidence, the traffic light will turn green. But recovery is also boosted by the gradual implementation of recovery plans that we have been waiting for for months. The € 40 billion tax cut on corporate and public investment should have been lifted from here at the end of the year. “It certainly took some time to deploy, but it’s time for our economy to resume,” said Matthew Plain. Recovery in other parts of the world (IMF predicts that global GDP will increase by 6%) should also accelerate the recovery of our economy. “The euro area is a bit behind, but the United States and China are already gone,” explains Charles-Henri Colombier.

Great news for us as our growth is mechanically driven upwards when the two major engines of the world economy are running at full speed. In this context, some small negative signals, such as rising commodity prices, need not be more worrisome than the reason. “There are certainly some bottlenecks, but they shouldn’t cause excessive inflation or runaway interest rates,” reassures Patrick Altus. In short, it seems that everything is in place to bring us back on the road to economic prosperity.

Yes, but here, history has often shown it to us: the most probable scenarios do not always come true, and we often make mistakes on the optimistic side … first First, we were completely protected from the epidemic rebound at the beginning of the school year. As a result, the initial recovery could barely pluck, forcing the government to bring some of its economic activity back under the glass …

But even if you avoid this pitfall, there are other concerns about the table. It begins with a wave of bankruptcy that can be triggered when the government discontinues aid to businesses. “In some sectors, which account for about 10% of activity, the impact is not completely absorbed,” Matthew Plain warns. However, these sectors, such as the hotel and catering industry, are very labor intensive. In fact, OFCE calculations could threaten the employment of 175,000 people. This will boost the unemployment rate, as job creation may not be enough to offset this phlebotomy.

“The recovery of the labor market will certainly be slower than the recovery of GDP,” Patrick Altus estimates. However, when employment deteriorates, households tend not to touch or even increase their savings as a precautionary measure. A fatal blow to consumption, nevertheless an important element of recovery. Fortunately, public agencies seem to want to go step by step so far, especially in the most difficult sectors.

The potential for rising unemployment is not the only reason that can encourage households to be cautious. Future tax increases to repay our huge public debt (which should reach 117% of GDP this year) may also encourage us to be ants rather than cicadas. Indeed, the current government continues to confess that it will not increase taxes. But less than a year after the presidential election, the French are well aware that these wonderful speeches could be wiped out after passing the voting booth … “Affecting future income. The fear of social reforms that give them also push them not to use all wool stockings, “Matthew Plain analyzes. In short, it’s hard to tell if it’s the well-being of captivity or the fear of the future that will drive French spending in the coming months.

Finally, even if rising commodity prices should not jeopardize our growth trajectory globally, there is still something to be noted. It’s oil. “If the price of the pump rises very sharply, the margin of recovery in consumption may decrease,” Hélène Baudchon warns. Or, worse, ignite the powder of the social ground and cause the regeneration of the yellow vest … “The tension on the ground is very strong, Christoph Barrow predicts, especially the number of presidential elections. A month ago we could experience a complex fall. Emmanuel Macron needs to play tight …

>> Instructions to change your life. This is the cover of the new issue of Capital. Access this edition in seconds from € 3.35.