The hotel and catering industry remains very affected by the health crisis.

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ISA HARSIN / SIPA

After the rebound in activity made possible by deconfinement, the recovery of the French economy will be "slower" at the end of the year and unemployment should climb to around 9.5%, according to INSEE (against 7.1 % at the start of 2020), some sectors remaining affected by the constraints linked to the epidemic.

Thus, if the economy should return to 95% of its pre-crisis level in the third quarter, it "approaches the start of the school year as an engine that would be both constrained and boosted", underlines the National Institute of Statistics (Insee ) in a new conjuncture report published on Tuesday.

Auto rebound 

"It is constrained by the health context with a virus which is still circulating actively, imposes restrictions and creates uncertainty even if we hope to be able to live better with it, but boosted by the economic policies put in place with massive support emergency plan and the recovery plan, ”Julien Pouget, head of the economic situation department at INSEE, told AFP.

The historic 13.8% drop in gross domestic product (GDP) in the second quarter should give rise to a mechanical rebound in the third of + 17%, slightly below the + 19% previously expected.

Then, growth will be only 1% in the fourth quarter, "reflecting the divergence between sectors almost returned to normal and others remaining depressed".

The hotel and catering industry still depressed

However, INSEE confirmed its forecast of a GDP contraction of around 9% over the whole of 2020, predicting that “at the end of the year, economic activity would still remain below its pre-crisis level ”, around -4%.

The government still expects a recession of -11%, but the Minister of the Economy Bruno Le Maire has already indicated that he would undoubtedly revise this estimate downwards by the presentation of the 2021 budget at the end of September.

Insee figures show that "we have been able to cushion the shock of the crisis and that we have put the necessary means to (...) preserve employment and purchasing power" of the French.

"We are in the right direction", reacted Bruno Le Maire, during a press conference presenting a plan to support hydrogen.

For Julien Pouget, "most of the way has been done for those sectors which have been able to restart their activity almost normally".

"It remains the hardest part, that is to say the sectors which are very affected, because they suffer from the health context, for example the manufacture of transport equipment, transport services, accommodation and catering, event-driven, ”he analyzes.

715,000 jobs already lost 

As a result, the recovery of the economy will be "slower" by the end of the year and the unemployment rate should climb "to around 9.5%" at the end of 2020, i.e. 1.4 points more than one year earlier, after a loss of 715,000 jobs in the first half alone.

The uncertainty linked to the evolution of the Covid-19 epidemic, which has seen a significant increase in contamination in France for several weeks, encourages households and businesses to be cautious.

INSEE also underlines "the risk of a significant demand shock", with consumption which would remain sluggish due to household confidence still below its pre-crisis level.

Conversely, the massive emergency support put in place by the government since the start of the crisis, as well as the first effects to come from the recovery plan - even if INSEE expects them especially in 2021 - will contribute to dynamism of the recovery.

The government is counting in particular on the 100 billion euro stimulus plan to instill a message of confidence in households and businesses, encouraging them to consume and invest.

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