Bercy notes growth forecast in France at 6.25% for year 2021

The government thus aligns without surprise on the forecast of INSEE and approaches those of the Bank of France and the OECD (each at 6.3%) published in September.

Le Monde with AFP

As a result, more dynamic economic recovery, the Government noted, on Monday, October 11, its growth forecast for 2021 to 6.25% – it was previously 6% -, thus aligning with forecasts of most major institutions.

“Growth is strong, it is strong, it is dynamic. We will therefore revisit the growth forecast for 2021, from 6 to 6.25%. We will find in December 2021 the level of pre-crisis activity activity “, announced the Minister of Economy and Finance, Bruno the Mayor, the National Assembly. MEPs started on Monday afternoon, the examination of the last budget of the Quinquennat.

The Government thus aligns without surprise on the forecast of INSEE and approaches those of the Organization for Economic Co-operation and Development and the Bank of France (each 6.3%) published in September . In a point of conjuncture, published on Monday, the Banque de France estimates that the activity “would be in October almost 100% of its pre-crisis level”.

The unemployment rate could fall back. 7.6%

This rebound in the French economy occurs after a historical recession in 2020 because of the health crisis, which caused a drop of 8% of the gross domestic product. If the government had a desire for “caution” so far, the success of the vaccination campaign and the establishment of the health care this summer, which has not had significant effects on the activity now allow it to lightly review his ambitions.

After the beginning of the year 2021 Atone, due to the maintenance of health restrictions, the activity is strongly distributed since mid-May. It should now find by the end of the year its level of the end of 2019, advance economists like the government. In addition to a mechanical rebound with the reopening of many activities, Bruno the mayor also sees the success of “the economic policy” of the government, support measures to the recovery plan, through the economic choices of pre-crisis.

Indicator sign largely forwarded by the executive in recent weeks: employment is located at unpredictable levels. The unemployment rate could fall to 7.6% in the third quarter, never-seen since the 2008 financial crisis.

New investments with the France 2030 plan

While the health risk seems to go away for now, Bruno the Mayor noted three new dangers for the French economy, whose risk of “exacerbated” conflict between nations, which must lead France and the Europe to rebuild their “independence”, including industrial. Emmanuel Macron will present on Tuesday in this perspective an investment plan, baptized “France 2030”, which aims to finance the development of technologies and carriers (hydrogen, biotechnology, space, nuclear, etc.).

The other risks pointed by the Minister of Economy are inflation, whose thrust, driven by the prices of energy, strike the purchasing power of the French, and the difficulties of increasing recruitment in a certain Number of sectors (restoration, building, etc.). “The full-employment, we can get there within two years,” said Bruno the mayor in front of the members, in a speech to election campaign accents, six months from the presidential election.

He also defended the government’s budgetary, despite the explosion of public debt and the deficit during the crisis. The latter, so far expected to 4.8% of GDP next year (after 8.4% this year), should finally be 5%. The government must still take into account the expenses generated by the France 2030 Plan, the future commitment income promised for young people, that the government is struggling to achieve, and compensation measures against rising energy prices.

/Media reports.