Despite a tense international context, the French economy is holding up. But for how much longer? According to the latest projections from the Banque de France published on Thursday, French growth should rise to 2.6% in 2022. A forecast revised upwards compared to the June estimates (2.3%) and now in line with the INSEE (2.6%) and Bercy (2.7%).
If the institution welcomes a “better-than-expected resilience” in 2022 thanks to the good behavior of demand and the “rebound of the services sector”, French activity should slow down significantly from next winter.
After an increase in GDP of 0.3% in three quarters, the croissance is attending “zero in the last quarter”, soit “at the time of the situation on the march of gas pourrait être la plus critique”, souligne la Banque de France.
Net slowdown in 2023
The turbulence would persist in 2023, a year in which growth would remain slow: around 0.5%, compared to 1% according to the Government. But “this projection is surrounded by very broad uncertainties linked to the evolution of the war in Ukraine”, as well as to the “quantities and prices of gas supplies” and “the duration of government measures to protect homes and businesses”. . notes the Banque de France.
For all these reasons, its economists prefer to maintain a range of GDP variation between 0.8% and -0.5% next year. In other words: a recession is not completely excluded, especially if the “stopping of gas deliveries” from Russia is accompanied by “a further increase in natural gas prices and a limitation in the supply of gas and electricity”.
We will have to wait until 2024 to expect a rebound. That year, the tensions in the energy markets should subside, allowing the tricolor economy to resume more sustained growth: +1.8%, again according to these new forecasts.
Inflation peak in early 2023
By 2024, inflation would remain high but gradually slow. For 2022, the Banque de France has raised its forecasts, assuming an IPCA (harmonized price index) of 5.8%, compared to 5.3% previously estimated.
2023 should still be marked by prices driven upwards with inflation peaking early in the year and a full-year average consumer price increase of 4.7% (range between 4.2 and 6.9 %). The long-awaited slowdown would finally occur in 2024 (2.7%) thanks to a pause in the prices of energy and food raw materials.
Job Resilience and Earning Power
In the field of employment, the Banque de France forecasts a drop in salaried employment in the market sector from the beginning of 2023 due to the slowdown in activity, breaking with the trend of recent months. Consequently, unemployment would rise “until stabilizing around 8% in 2024”.
On the other hand, “the public debt ratio, already very deteriorated after the Covid crisis, would stabilize in the best of cases by 2024, due in particular to the cost of support measures such as a tariff shield.”
Source: BFM TV
