Paris (AFP)

The French economy will take a little longer than expected to erase the effects of the crisis, according to the Banque de France, with a recovery in activity which will be gradual in 2021, after the historic shock suffered this year.

Gross domestic product (GDP) should thus rebound by 5% next year, after a historic contraction of 9% this year, forecasts the Bank of France in its macroeconomic projections published on Monday.

This scenario "is undoubtedly rather cautious", estimated the governor of the Bank of France, François Villeroy de Galhau, Monday morning on France Inter.

INSEE will publish its own forecasts on Tuesday.

The government expects growth of 6% next year, after a record contraction of 11% this year.

If the economy were a staircase, France would have plummeted 31 steps in the spring.

After a recovery, it would still remain eight steps from the summit, said the governor.

"We expect a very gradual rise in these eight markets. We expect that we will climb one in the first quarter of next year (...) and that in total over the whole of 2021 we would rise. five".

The Banque de France in fact formulates the hypothesis that the epidemic will continue, before a generalized deployment of vaccines at the end of 2021, implying that the economy does not return to its pre-crisis level until mid-2022.

Thus, after the rebound next year, growth will continue at the same rate of 5% in 2022, before settling to a "less unusual" level slightly above 2% in 2023, forecasts the French central bank.

It is therefore less optimistic about the strength of the recovery than it was three months ago, when it expected the economy to contract less this year and a much stronger rebound of 7.4% next year.

The second wave of the epidemic and the second containment went through this.

And even if the latter, less strict than in the spring, reduced activity less because most companies were able to continue their work, it still caused the economy to fall again.

In November, activity fell to 11% below its pre-crisis level, and it should remain 8% below normal in December.

And as deconfinement promises to be slower than expected, as health restrictions are expected to last for many more months at the start of 2021, the economy will remain underweight.

- peak unemployment at the start of 2021 -

According to the Banque de France, household consumption will recover but gradually and "over the whole of 2021, they would not yet touch" the 130 billion euros of savings made more or less forced this year .

We will therefore have to wait until 2022 to see consumption return to its pre-crisis level, and perhaps even temporarily exceed it.

For businesses too, returning to the pre-crisis level of investment will take time, even if the stimulus plan and its significant cut in production taxes will allow them to improve their margins a little.

If the Banque de France does not give a forecast on bankruptcies, it notes that the financial situation of companies has deteriorated markedly this year, despite the massive support measures put in place by the State.

France should therefore experience a rapid rise in unemployment, which would reach a peak close to 11% in the first quarter of 2021, before falling to 9% at the end of 2022.

Faced with uncertainties about the evolution of the epidemic, the Banque de France also presents a more favorable scenario of a GDP rebound of 7% in 2021 if the health situation improves more quickly.

Conversely, a more pessimistic scenario of still strong circulation of the virus would lead to a further contraction of GDP of 1%.

© 2020 AFP