Unheard of for fifty years: + 7% over one year. Published on the morning of Friday January 28 by INSEE, the first estimate of French growth for 2021 goes well beyond the forecasts, however revised upwards at the end of last year by the Banque de France, which counted on a already very encouraging +6.7%.
→ ANALYSIS. How partial unemployment has supported growth
“In the fourth quarter, the French economy exceeded the wealth it had in 2019 and returned to its pre-crisis level”, welcomed Friday, January 28 on France 2 the Minister of the Economy, Bruno Le Maire, for whom “the French economy is running at full speed and has a strong reaction capacity”.
However, he did not hide the fact that the recovery still leaves aside certain sectors very affected by the health crisis. “There are sectors that continue to have difficulties: tourism, events, hotels… We are supporting them, but the vast majority of French sectors are starting up once more”, he insisted.
Household consumption remained relatively subdued
It remains to be seen whether the French economy still has the possibility of continuing its good momentum, while, for example, the German neighbor is showing signs of running out of steam with a small +1.4% growth in 2021 and even a decline. 0.7% in the fourth quarter of 2021.
→ READ. Growth: coming out of the crisis, France in the leading group of the euro zone
“Much of the money is still stuck in household savings and has not yet flowed back into the economy., explains Eric Heyer,director of the analysis and forecasting department of the OFCE. This money saved will eventually come out either in consumption or in investment. This is not yet the case, but it is to come. »
According to INSEE figures, household consumption also remained relatively shy in 2021 (+ 4.8%), without catching up to its pre-crisis level. If they have invested more in real estate than before the Covid, the French thus keep a large savings, estimated at 175 billion euros.
+ 3.5% in 2022 according to the IMF
“70% of this “Covid savings” are placed in liquid and quickly mobilizable supports”, insists Eric Heyer, for whom this cash might correct the effects of inflation on purchasing power.
This inflation (+ 2.8% in 2021) remains the major concern for 2022, to the point that the IMF has just revised its growth forecast for France downwards to “only” 3.5% in 2022. In question: uncertainties over the Omicron variant and supply chain issues that may drive up prices. By increasing production costs, and therefore prices, the expected rise in wages might also contribute to inflation.
Consumption: +5% to +7% in 2022
The OFCE wants to be reassuring, however: having questioned the various French institutes of economic expertise, it assesses inflation between + 1.5% and 2.5% in 2022, expecting a peak in the first half. “All the institutes anticipate that GDP growth should be largely supported by household consumption, which should grow between 5% and 7% in 2022, and investment which should remain dynamic”, write Elliot Aurissergues and Pierre Madec, of the OFCE.
Éric Heyer sketches a screenplay “in which households would dissave in 2022 a fifth of the “Covid savings” accumulated since the start of the crisis”, which would result in growth of 6.2% and an unemployment rate of 6%.
However, everything will depend on the ability of the economy to gently shed the infusions of public aid that have enabled it to hold on over the past two years.
