French economic activity rebounded sharply in 2021, with growth of 7%, unheard of for 52 years but which comes after the historic recession suffered in 2020 due to the health crisis.
This first estimate, published Friday by INSEE, exceeds the forecasts of economists, such as those of the National Institute of Statistics and Economic Studies and the Banque de France.
The last time the French economy had done better was in 1969 just after the crisis caused by the May 1968 movement.
“It’s a spectacular rebound”, which “erases the economic crisis” after the fall in GDP of 8% in 2020, welcomed the Minister of the Economy Bruno Le Maire on France 2.
In the fourth quarter, activity “now clearly exceeds” its pre-health crisis level, underlines INSEE. “It also proves that the government’s economic policy is effective,” defended Mr. Le Maire, when many ministers praised the performance of the French economy on social networks.
In total, the State will have spent a little more than 60 billion euros last year, at the cost of a public deficit which should still be around 7% of GDP and a public debt of around 113%.
With such growth, France should experience one of the best performances in the euro zone, commensurate, however, with the magnitude of the shock suffered the previous year.
GDP growth peaked in Germany at 2.8% last year (-4.9% in 2020). It reached 5% in Spain (-10.8% in 2020).
While the French economy experienced slow growth at the start of the year, marked by the third wave of the epidemic and still significant restrictions, it accelerated sharply from the summer, with a slowdown, however, to 0.7 % in the last quarter, at the time of the fourth wave of Covid.
– The crisis “not yet absorbed” –
On the employment front, France saw the number of unemployed fall to its lowest level in nearly a decade in the last quarter, according to figures released this week.
“It is clearly a very dynamic rebound, we could hardly have hoped for it at the start of 2021”, advances Charlotte de Montpellier, economist at ING.
From there to say that the crisis is erased, like the Minister of the Economy? “We cannot go that far. Of course, the French economy has returned to its pre-crisis level, we are 0.9% above. But we have not erased the shock, we have learned to rebound, and we see that the economy must learn to live with the global imbalances that the shock has generated, inflation and disruptions in production chains”, she adds.
In 2021, GDP thus remains “1.6% below its average level in 2019”, specifies INSEE. Certain sectors, such as tourism, transport or the hotel and catering industry have remained penalized by the restrictions.
“The crisis has not yet been absorbed”, summarizes Philippe Waechter, chief economist at Ostrum Asset management, stressing in a note that to close the gap with the pre-crisis growth rate, 5% growth would be needed. in 2022.
– Inflation and purchasing power –
Household consumption thus only returned to its pre-crisis level at the very end of the year. “The recovery was mainly driven by public spending and investment, the latter also being linked to state aid such as guaranteed loans and the solidarity fund,” said Selin Ozyurt, economist at Euler Hermes.
For 2022, the government expects growth of 4%, when the Banque de France forecasts 3.6%.
This was before the Omicron wave hit the country, but the government wants to be optimistic: “I do not fear the effects of Omicron” on growth, Bruno Le Maire assured Wednesday.
“The effect of Omicron will be limited”, abounds Selin Ozyurt, the absenteeism and the disorganization of the work which the variant generates being able “to catch up if the wave is not too long”.
The other major risk for the economy remains inflation, at 2.8% over one year in December, driven by energy. It could weigh on the purchasing power of households, curb their consumption, not to mention the social risk.
In recent weeks the executive has deployed more than 15 billion euros to limit its effects and the subject is emerging as the first concern of the French less than three months before the presidential election.
The rebellious deputy from the North Adrien Quatennens thus considered that “growth for growth’s sake deserves to be questioned”, at a time when “France is in a situation of social emergency”.
The environmental candidate for the presidential Yannick Jadot pointed to an “unevenly distributed” growth which “does not benefit everyone”.