Clément Perruche 1:51 p.m., January 28, 2022

According to INSEE, French GDP growth reached 7% in 2021. A record to be put into perspective with the fall, also record, of GDP in 2020. For the economist Matthieu Plane, this record growth is a good news for the economy, but threats weigh on future growth, in particular the price of raw materials as well as the debt.

INTERVIEW

According to the first estimates from INSEE, published this Friday, January 28, French GDP has increased by 7% over the past year.

If this figure is confirmed, it would be the highest annual growth recorded for 52 years in France, and one of the largest in Europe.

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Several factors explain this record figure.

First, the year 2020 was marked by a record drop of 8% in GDP due to Covid-19.

So growth in 2021 has mechanically caught up with this fall.

But the figures revealed by INSEE this Friday exceed all forecasts.

This shows that the French economy is making a strong comeback.

Growth driven by household consumption and investment

“This growth is historic. As 2020 had been historic on the decline”, analyzes Matthieu Plane, economist at the OFCE (French Observatory of Economic Conditions) and guest of Europe Midi this Friday.

"Growth has been stronger than expected because the recovery has been faster. For a year and a half, France has been doing a little better than the major European countries. This means that there is economic management and more efficient sanitary facilities."

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This strong growth can also be explained by the strong support that companies have received throughout the health crisis.

The "whatever it takes" avoided cascading bankruptcies and allowed the economy to restart very quickly.

The rise in consumption, too, partly explains this spectacular leap in growth.

During the various confinements and curfews, the French saved a lot.

Savings that were spent when stores reopened.

“Households, when the health restrictions are lifted, return to consume”, rejoices Matthieu Plane.

"It allows you to be resilient."

Industry is also picking up very strongly, as is investment by households, businesses and communities.

“Companies invest. Normally, this is not the case in crises. They have notably accelerated their digital transformation, which is favorable for the future”, greets the economist.

Debt and commodity prices threaten the future

Sectors continue to suffer, however, such as the hotel industry, transport, tourism, but INSEE is optimistic for the year 2022 and estimates that growth for the current year will amount to 4%.

Matthieu Plane still foresees difficulties for the coming year.

"We see that there are some dark clouds, in particular the price of raw materials, inflation, the question of the debt which will arise. The 'whatever it takes' has been effective but it leaves a debt important", he explained at the microphone of Europe 1.

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With the increase in debt, questions arise around the repayment of the huge bill that the Covid crisis represents.

"This is the challenge of the aftermath", deciphers the economist.

"Today, there are no more budgetary rules in Europe. The Central Bank protects us from the markets. In reality, we have no risk on our debt. But the question will be to renegotiate budgetary rules and it is likely that there will be a budgetary effort to be made for the future."