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“Spectacular” rebound of the French economy in 2021, unheard of for 52 years

For the first time in 52 years, France recorded growth of 7%. At the end of the year, activity returned to its pre-crisis level. The economy therefore rebounded very clearly in 2021 after the recession of 2020 with the health crisis linked to Covid-19. This first estimate, published Friday by INSEE, greatly exceeds all forecasts made by economists, the Institute of Statistics, like the Bank of France, counting for example on a growth of 6.7%. 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”, welcomed the Minister of the Economy Bruno Le Maire on France 2. “It also proves that the government’s economic policy is effective”” a- 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 be around 7% and a public debt around 113 “With such growth, France should sign one of the best performances in the euro zone, commensurate, however, with the extent of the shock of the health crisis on the national economy last year. Growth thus plateaued in Germany at 2.7% last year (-4.9% in 2020), hit hard by shortages of raw materials and components for industry.

While the French economy experienced slow growth at the start of the year (+0.1% in the first quarter and +1.3% in the second), marked by the third wave of the epidemic and still significant restrictions (covers fire, business closures, gauges, etc.), it accelerated sharply in the second half, with GDP growth of 3.1% in the third quarter and 0.7% in the last, when the fourth wave of the Covid hit France. In the fourth quarter, activity “now clearly exceeds” its pre-health crisis level, underlines the National Institute of Statistics.

On the jobs front, France has seen a record drop in unemployment, with the number of unemployed hitting its lowest level in nearly a decade in the last quarter, figures released earlier this week showed. However, over the whole of 2021, GDP remains “1.6% below its average level in 2019”, specifies the institute, a sign that 2021 does not completely mark a return to normal for the economy. , the first part of the year having again been marked by major health restrictions linked to the Covid-19 epidemic. Certain sectors, such as tourism, transport or the hotel and catering industry have remained penalized by these restrictions, which have reduced travel and the social life of the French.

4% growth in 2022?

This is felt in particular in household consumption, which only returned to its pre-crisis level at the very end of the year, but which, with an increase of 4.8% over the whole of 2021 remained lower than its 2019 level. In 2021, growth was particularly driven by the strong increase in the production of goods and services (+7.4%, after -8.5% in 2020), even if the production of goods “remains significantly down” from its average level in 2019, according to INSEE. Investment by households (real estate, etc.), companies and local authorities, rebounding by 11.6%, greatly exceeds its 2019 level. Finally, foreign trade contributes slightly positively to growth, even if on average annual “exports and imports remain in 2021 at a particularly degraded level”.

For 2022, the government expects growth of 4%, when the Banque de France forecasts 3.6%. INSEE, which has not yet published a forecast for the whole of the year, in December anticipated growth of 0.4% in the first quarter, then 0.5% in the second. 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 French growth, assured Bruno Le Maire on Wednesday, promising that the government would continue to support companies penalized by health restrictions. The executive has also deployed more than 15 billion euros to limit the effects of accelerating inflation, in particular energy prices, on households.

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