France – 2020-2021 Scenario: Rebound amid many sources of uncertainty

France – 2020-2021 Scenario: Rebound amid many sources of uncertainty
  • Summary
  • Recent trends in activity
  • Focus: Rising debt and business failure risks
  • Focus: Stimulus plan and looser fiscal policy
  • Our scenario for 2020-2021

In summary

With a favorable carryover following the recovery in the second half of 2020 and the set up of the "France Relance" stimulus plan, the rebound in activity should be significant in 2021. We forecast a 7,1% GDP growth in 2021 after a record decline of 2020 (-9,1%). This recovery will not allow GDP to come back to its pre-crisis levels but the recovery plan, which will be implemented over several years, will keep on supporting the economy in 2022, as the return to fiscal austerity is not on the agenda.

France – 2020-2021 Scenario: Rebound amid many sources of uncertainty

The French economy saw an almost automatic upturn starting in May/June 2020. However, it will take time to return to pre-pandemic levels. Consumer spending will be the prime mover, which, provided confidence returns, could be bolstered by the savings accumulated during the months of lockdown. The government's stimulus plan should boost investment spending by business.

Pierre BENADJAOUD, Economiste