After France’s national statistics institute, Insee, last week, the Bank of France raised its 2021 growth forecast for the French economy to 6.3% on Monday, September 13, due to a rebound that was “stronger than anticipated” previously.
This surpasses the government’s forecast of 6%, whereas until now, the French central bank expected a GDP growth of 5.75%. Insee, on its part, is betting on a growth of 6.25%.
The Bank of France thus forecasts sustained growth in 2022, at 3.7%, and then 1.9% in 2023, slightly less than its previous forecasts of 4% and 2%, respectively. The government is counting on 4% growth in 2022.
The central bank has also significantly raised its expectations for net job creation, now expected to be 289,000 in 2021 (instead of 163,000 previously). However, the unemployment rate is expected to stagnate around 8.1% by 2023, as the return of unemployed individuals to the labor market is expected to cause the working-age population to grow faster than job creation.
