1.5% growth in France in the first half of 2021, except in the event of reconfinement



The resumption of French growth is suspended from government measures to combat Covid-19. INSEE estimated, Thursday, February 4, that France will experience growth of 1.5% in the first quarter on the assumption that health restrictions remain those of January.

→ ANALYSIS. Covid-19: why the executive backed down in the face of confinement

While the epidemic situation is still worrying, the hypothesis of a new confinement has reappeared but remains for the moment ruled out by the government. With the establishment of a lockdown of the type of November for a period of one month, this growth would become zero, and the gross domestic product (GDP) would shrink by 1% if this confinement were to last seven weeks, a added the national statistics institute.

Smaller than expected decline in GDP

The only certainty is that the level of GDP will remain below its pre-crisis level, i.e. that of the fourth quarter of 2019, by 4.5 or 6 percentage points depending on each of the three scenarios. . For 2020 as a whole, the 6% growth target set by the government “Is not unattainable”, estimated Julien Pouget, head of the conjuncture department of INSEE, during an online press briefing.

In particular, he highlighted the smaller than expected decline in GDP in the last quarter of 2020 (- 1.3%) despite the second confinement, which leads to “A greater acquired effect” allowing to start the year 2021 on a better basis.

This good news also allows “To revise downwards the cost of the tightening of sanitary measures”, according to him. same “Harsher confinement would not have the same impact as April-May” because “There has been a lot of learning and adaptation, teleworking has developed, we have masks, we have tests”, explained Julien Pouget.

Household consumption down 7%

But “The crisis is a test of endurance” and “The longer it lasts, the more the rebound capacity becomes uncertain in the most affected sectors”, also estimated the head of INSEE.

Household consumption, the main component of GDP, remained 7% lower in January compared to its pre-crisis level, the institute further reported. A relapse after a month of December which had been marked by a strong rebound in consumption after the second confinement, with a difference of only 4% compared to the fourth quarter of 2019, after – 15% in November.

→ READ. Consumption: the crisis accentuates the hunt for low prices

By analyzing data from bank cards and cash registers in supermarkets, INSEE was able to measure the consequences of the latest health measures on consumption. In particular, the institute noted a drop of 6 to 7% in consumption when the curfew advanced to 6 p.m.

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