- Because of the coronavirus epidemic and containment, French GDP is expected to fall by 8% in 2020.
- Faced with the crisis, the State is spending billions of euros to support the economy.
- Debt is expected to reach 115% of GDP in 2020.
With nearly 15,000 deaths recorded in France since the beginning of the epidemic, the coronavirus is obviously a trying health tragedy, both for health structures and for the many bereaved families. Even if it may seem secondary in this context, the question of the economic consequences of the pandemic also arises, and the government is aware of it.
This Tuesday, Bruno Le Maire, the Minister of the Economy, has thus largely revised down the growth forecast for 2020: the GDP should thus fall by 8% over a year. A month ago, the forecast was only -1%… If the government's updated figures are confirmed, this year will be the worst in terms of growth since 1945, far outstripping the 2009 recession by its magnitude.
Annual change in GDP
Infogram
Obviously, this disappearance of growth leads to a drying up of state revenues (less taxes collected) and an explosion of spending, in particular to avoid as much as possible people finding themselves unemployed (partial unemployment scheme, see below). ), or that companies find themselves bankrupt (deferral of charges, lump sum compensation).
The consequence is simple: the deficit will widen (- 9% forecast this year), and the debt should reach a new record since 1944, reaching 115% of GDP.
An exploding debt
Infogram
Among the costly measures paid for by the State, there is therefore the partial unemployment scheme. Very little used during the economic crisis of 2008, this time it was massively used. Its protective side has been strengthened: the State now covers 100% of the cost of unemployment declared by companies (which pay 84% of the net salary to their employees), within the limit of 4.5 times the minimum wage.
Obviously, given the trend in the number of partial unemployed, the bill has increased considerably over the past month.
Partial unemployment
Infogram
Will these devices be used to avoid business failures? According to a study by Coface, a credit insurance expert, published in early April, the coronavirus pandemic could lead to an increase in defaults by 15% in 2020, with 58,000 companies involved.
A total that would nevertheless remain below the "record" of 2009, where 63,000 business failures had been identified. But for the moment these are only estimates, which will have to be revised upwards if the crisis continues.
Number of business failures
Infogram
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- Debt
- Deficit
- Economy
- Containment
- Coronavirus