After shutting down during confinement and its gradual restart, the French economy will take time to recover from the coronavirus pandemic, warns the Banque de France, which anticipates a record fall of around 10% of GDP this year, as well as a historic unemployment rate in mid-2021, which could reach 11.5%.
>> LIVE - Follow the evolution of the situation Tuesday June 9
"Like the rest of the world, the French economy suffered a shock of unprecedented magnitude in the first half of 2020" with the strict containment implemented in mid-March and lifted in mid-May, says the French Central Bank in its projections macroeconomics until 2022 published Tuesday. The "gradual" recovery started with the lifting of containment and which will result in a rebound in the economy in the third quarter will not be enough to avoid an unprecedented recession in the economy this year.
Estimated at -10%, this forecast is close to the -11% anticipated by the government in the third amending finance bill that it will present to the Council of Ministers on Wednesday. After that, "2021 and 2022 would be years of clear but gradual recovery," predicts the Banque de France, with growth of 7% expected next year, then a 4% increase in GDP in 2022. But "this strong Apparent rebound would not make it possible to return to the level of activity at the end of 2019 before mid-2022 ", warns the French central bank.
GDP fall by around 15% in the second quarter
Indeed, the French economy must restart from a historically disastrous level. After the 5.3% drop in GDP in the first quarter, according to the INSEE assessment, the economy should plunge by around 15% in the second quarter, forecasts the Banque de France. It is a little more optimistic than INSEE, which expects a fall of 20%.
Because, according to the central bank, activity rebounded in May, with a loss of activity estimated at -17% in a typical week in late May compared to normal, against -27% in April and -32% at the end of March. And the month of June should confirm this trend, with a loss of activity reduced to -12%.
CORONAVIRUS ESSENTIALS
> First unconventional evening at the restaurant: "It feels like going back three months"
> Economic crisis: "There will be two shocks, one on unemployment and one for young people"
> How to distinguish from allergies from coronavirus?
> Seasonality, cross-immunity, end of the epidemic: the latest questions on the virus
> Can we catch coronavirus on a plane?
> Coronavirus: 5 mistakes not to make with your mask
But the "essential" element of the recovery will be the pace of the rebound in household consumption. It is "likely that the expected rise in unemployment and the global context of high uncertainty will continue to weigh on purchasing behavior", judges the BoF. With cumulative savings around 100 billion euros, the household savings rate will exceed 22% this year and consumption will fall by 9.3%.
Unemployment: a level above historical precedents
If the massive system of partial unemployment put in place by the government will somewhat slow down the impact of the crisis on employment and purchasing power this year, the unemployment rate should reach more than 10% at the end of 2020, and climb to a peak above 11.5% in mid-2021, a level "above historical precedents", projects the Banque de France. And there again, it will be necessary to wait until 2022 to see it descend to 9.7%. Purchasing power should fall slightly by 0.5% this year, before starting to rise again but at a much slower pace than activity.
The whole of this recovery scenario is based on a persistent but under control circulation of the Covid-19 and an economy which adapts to health constraints. And it does not take into account future stimulus measures that the government should take, both in its new adjusted budget and in the stimulus package announced for the start of the school year. This recovery could also be faster if a lasting medical solution arrived in mid-2021, notes the Banque de France. Or conversely, much slower if the epidemic picks up steam and again imposes containment measures, she warns.