Some cyclical indicators support their hopes and suggest a quick economic rebound after the severe recession of 2020 (GDP fell by 8.3%, according to Insee).
In a note, the French Economic Observatory (OFCE) forecasts a GDP growth of 5% on average for 2021.
To overcome the economic crisis, the OFCE is counting on a hidden treasure: the “Covid-savings” of the population, which has naturally spent less since the beginning of the health crisis. In France, this nest egg amounts to 160 billion euros, or about 7% of GDP.
If 20% of this surplus savings is spent, French growth would be 6% in 2022, the unemployment rate would reach 8.7%, and debt would stand at 115% of GDP. The country could then catch up on its “growth deficit”. However, if the French do not spend their savings, the growth rate would cap at 4.3%, the unemployment rate would rise to 9.4%, and public debt to 117% of GDP in 2022.
