France’s GDP drop in 2020 will exceed 10%

US, WASHINGTON (ORDO NEWS) — The French economy will shrink by more than 10% this year against the backdrop of the coronavirus pandemic and recover to the level reached last year, only around mid-2022, the country’s central bank predicts.

According to the basic forecast of the French GDP regulator, it will grow by 7% in 2021 and by 4% in 2022.

Despite the growth of the economy in the next two years, unemployment will continue to grow and reach a record level close to 12% in the first half of 2021, and by the end of 2022 it will drop to only 9.7%, the Bank of France expects.

According to an unfavorable forecast, if the pandemic intensifies again and the authorities maintain the restrictions imposed to combat the coronavirus, France’s GDP will fall by 16% in 2020.

In mid-March, the French government imposed severe restrictions to contain the spread of coronavirus. Since May 11, restrictive measures have begun to mitigate in the country.

Nevertheless, the economic outlook remains uncertain. A large role in recovery will be played by the household savings rate, the central bank said. According to the regulator, by the end of the year, savings could exceed 100 billion euros in pre-crisis expectations.

“Only the emergence of a durable medical solution in mid-2021 will restore household confidence sufficient to clearly reduce the savings rate,” – said the Bank of France.

Last week, French Minister of Economics and Finance Bruno Le Mayor said that this year the economy will shrink by 11% due to the coronavirus crisis.


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