France ‒ Scenario 2021-2022: A recovery well underway

France ‒ Scenario 2021-2022: A recovery well underway
  • Summary
  • Recent trends in activity
  • Focus: Inflation
  • Our scenario for 2021-2022

In resume

We now envisage a more sustainable recovery in activity, driven primarily by consumption – but also by investment – which would continue to recover in the coming quarters, supported by the stimulus plan. The lifting of restrictions, emergency measures and the stimulus plan would support the recovery, with GDP returning to its pre-crisis level in Q4 2021. However, uncertainty continues to weigh on our scenario.

France ‒ Scenario 2021-2022: A recovery well underway

Main components of the scenario: 1/ Household spending should the main growth driver in the coming quarters. After a strong mechanical rebound during the summer due to the reopening of shops and the recovery in consumption of services, it should gradually return to its pre-crisis level. 2/ Business investment is expected to continue to grow, supported by the stimulus plan and the continuation of accommodative monetary policies, guaranteeing still very favourable financial conditions. 3/ The contribution of foreign trade to growth is more uncertain. 4/ Inflation will remain an important topic in the coming months and may be fairly volatile.

Pierre BENADJAOUD, Economiste