According to the latest data released by the Banque de France on Monday, December 14, the second containment will have had less of an impact on the economy than the spring containment. GDP is expected to rebound by 5% in 2021, but will not return to normal until mid-2022.
A smaller decline than in spring
While the accommodation and catering sector continues to suffer from the second confinement, the economic impact was less than in the spring for most sectors.
In industry and construction, business remained stable in November, just as it did in pharmaceuticals, other industrial products and agri-food.
At its monthly economic update, the Banque de France announced its forecasts: GDP should rebound by 5% in 2021 and 2022, and by 2% in 2023.
"We're coming out of a year of economic fog. Our role is to try to see things clearly. The situation is bad, but there are a few reasons for hope," declared Banque de France Governor François Villeroy de Galhau on December 14 in an interview with France Inter.
In December, the French economy was -8% down on the level prior to the health crisis, compared with -31% in April. According to François Villeroy de Galhau, "this means one thing: we have learned to work while protecting ourselves: health protocol, telecommuting, etc.".
No return to normal before mid-2022
Despite these less worrying results than in the spring, the Governor of the Banque de France stressed that, with economic activity down 9% on average over 2020, this was a "very severe recession, unprecedented since the last war".
According to the latest estimates, the situation is not expected to return to normal before mid-2022, although there are many uncertainties and projections depend on the evolution of the epidemic. " We are making the assumption that the epidemic will continue to exist in early 2021, and that the full effect of vaccines will not be felt until late 2021," explained François Villeroy de Galhau.
The level of household savings is also one of the uncertainties. "The French are spending less than usual. Over the whole of 2021, they won't touch this share. If they decide to spend faster, that could be a point of improvement", explained the Governor of the Banque de France, who estimates that savings should reach 130 billion euros by the end of 2020.
Unemployment is expected to approach 11% in early 2021, falling to 9% by the end of 2022.