For the end of 2020, INSEE anticipates unemployment at 9.7% and GDP stagnation

The miracle is receding on the economic front: the resumption of the coronavirus epidemic since the start of the school year and the new restrictions imposed on certain sectors should weigh on activity and stop the rebound of the French economy.

On Tuesday, INSEE estimated that gross domestic product (GDP) should stagnate in the last quarter of 2020, marking a halt after the strong rebound in the third quarter (+ 16%).

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The National Institute of Statistics has so far forecast a small growth of 1% of GDP in the last quarter.

However, he confirms his forecast of a 9% recession for the whole year, when the government expects a 10% drop in GDP.

"This forecast reflects the great uncertainty which characterizes these coming months", commented Julien Pouget, head of the economic department at INSEE, during a press conference, without ruling out the risk of a relapse in GDP.

Investment at half mast

Consequence: GDP "would remain, at the end of the year, 5% below its pre-crisis level", ie no progress since the summer, assesses INSEE.

A dire omen when the government hopes to have caught up in 2022 for the loss of activity due to the crisis.

Because even if the restrictive measures are more targeted than the confinement decided in the spring, they will further deteriorate the prospects of the sectors concerned, namely hotels and restaurants, leisure or transport.

The other sectors of activity should see the recovery continue.

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This anxiety-provoking climate will also weigh on investment.

"By wait-and-see" business, it would no longer progress by the end of 2020, pending the possible impact of the recovery plan.

Moreover, nearly a third of companies still do not know how to estimate the moment when they will return to normal activity, ie "the highest proportion since the start of the crisis", notes INSEE.

The 10% unemployment reached?

In the last quarter, consumption, the engine of French growth, could deteriorate further by 1%, to end the year down by 7%.

At the same time, household savings should end the year at a high level.

Their worries about unemployment are also still high.

And the INSEE forecast has nothing to reassure them, with an unemployment rate revised upwards to 9.7% at the end of the year (against 9.5% previously), i.e. 1.6 points more until the end of 2019. 

"It is not excluded that the 10% is reached", even estimated Julien Pouget.

The massive job cuts in the first half of the year (715,000 salaried jobs), a third of which was concentrated in the most affected sectors, will only increase slightly in the second half, reaching 730,000 salaried jobs and 840,000 jobs in total. .