French growth should finally exceed 6% this year

The economic recovery is finally shaping up to be a little stronger than expected this year, according to INSEE, which now expects growth of 6.25%, the fourth wave of the epidemic and the health pass not having slowed down. the recovery started in the spring. The National Institute of Statistics slightly raised its growth forecast for 2021 on Tuesday compared to its previous estimate of 6% published in early July.

This new forecast is now higher than that of the government, which at this stage expects an increase in gross domestic product (GDP) of 6%, after the historic recession of 8% last year. Not only was the rebound in activity and employment better in the first half of the year, but “the notable fact this summer is that we experienced a fourth epidemic wave, and that despite this new wave, the recovery continued ”, underlined Julien Pouget, head of the economic department at INSEE during a press conference.

No effect of the health pass

Even the health pass, introduced in cinemas, places of leisure, shopping centers or restaurants, would have only “moderately affected” these sectors, even if the impact was slightly greater for restaurants, estimates the Insee. Enough to consolidate the government in stopping whatever it costs and in its new strategy of “tailor-made” support to companies still penalized by the pandemic. Especially since, according to INSEE, the amplification of vaccination should support consumption in sectors subject to the pass.

More broadly, the institute predicts that household consumption, the traditional engine of French growth, will catch up by the end of the year compared to its pre-crisis level. The French still have a considerable savings surplus, which reached 157 billion euros between the start of the health crisis and the end of June 2021, according to data from the Banque de France published on Tuesday.

Difficulties for certain sectors

In the event that the health situation does not impose new restrictions, INSEE now expects GDP growth of 2.7% in the third quarter (after stability in the first and + 1.1% in the second), then 0.5% to the fourth. The French economy would thus return to its pre-crisis level at the end of 2021, a level from which it is no longer very far.

But these figures do not erase the particular difficulties of certain sectors, such as transport and the hotel and catering industry which continue to suffer from the consequences of the pandemic, in particular the lower frequentation of France by foreign tourists or the reduction in travel to France. ‘business. In addition, INSEE notes the uncertainties that still weigh on the recovery, in particular because of the tensions on the supply of companies and recruitment. More and more companies are reporting difficulties on both fronts.

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