The “black swan” of the pandemic leaves a significant impact on the main European economies now turning towards the new year. The challenge now is the 2021 growth rate.
Although of varying intensities and depths, the recession is very significant and will leave its mark. With the eurozone GDP decreasing by 7.8%, the latest estimates from the European Commission show a free-fall GDP of 9 to 10% in Italy, -5.6% in Germany, -12.4% in Spain, and -9.4% in France.
Expectations are now all focused on the year 2021. There are differences in the major economies of the Old Continent.
One of the most relevant variables, aside from the evolution of domestic demand, will be exports. From this perspective, the focus is on the upcoming decisions that will be made in the United States by the new Biden administration. Could the tariff season of the Trump era be considered definitively over?
Before the crisis, the French GDP was below by eight points. According to the latest data published by the National Institute of Statistics, after the -12% recorded in November, the economy is expected to stabilize in December at a value equal to eight percentage points below its pre-crisis level. For the entirety of 2020, the recession is expected to result in a decrease of -9%.
However, there are glimmers on the horizon, with an estimated recovery of 6% in 2021 with the arrival of vaccines and the hoped-for gradual easing of restrictive measures. In general, the GDP rebound will be less robust than what was anticipated a few months ago.
This is the hypothesis of the Bank of France, which sets the growth bar at 5% in 2021. Only by mid-2022 is the GDP expected to return to its pre-crisis level. Three months ago, the central bank was aiming for a 7.4% rebound in 2021.
