2023-09-19 15:02:36
The French economy should benefit from renewed growth in 2023 thanks to dynamic exports in the spring, the Banque de France indicated on Monday. However, its progress will be slowed down in 2024 and 2025 by a sluggish global economy and more expensive oil.
According to these new forecasts, inflation will continue to decline until 2025, stemmed by the unprecedented interest rate increases by the European Central Bank (ECB). After an increase of 2.5% in 2022, gross domestic product (GDP) will surely grow more than expected in 2023 (0.9%), very close to the 1% increase expected by the government.
Decline in inflation, a boon for consumption
According to the Banque de France, growth is expected to remain at 0.9% in 2024, then grow by 1.3% in 2025. It will be slowed down by a more difficult global economy, particularly due to the difficulties of Germany and China which would undermine French exports.
Household consumption should, however, regain strength, thanks to the decline in inflation. “The French economy would therefore manage to gradually emerge from inflation without recession, even if an unfavorable international context would weigh on the recovery,” indicates the Bank of France.
“On the path to defeating inflation”
In 2023, inflation is expected to reach 5.8% then 2.6% in 2024. The decline is less rapid than initially expected. The reason: the rise in oil prices, Saudi Arabia and Russia having voluntarily reduced their supply. According to the Banque de France, the situation is however “out of proportion” with the tensions of the post-Covid rebound and the start of the war in Ukraine.
“We are on the path to defeating inflation, without causing recession or massive unemployment,” welcomed the governor of the Bank of France, François Villeroy de Galhau, in The cross. « [Mais] to cure this disease, we must know how to be tenacious regarding the remedy which is interest rates: we will therefore maintain those of the ECB at their current level of 4% for as long as it takes. »
Full employment soon?
In the meantime, faced with rising prices at the pump, the government wants to allow the resale of fuel at a loss for six months from “early December”. “This is a possible avenue, alongside the monitoring of refiners’ margins”, estimates the governor of the Bank of France, who considers these options “preferable to the return of a rebate at the pump”.
The unemployment rate will also gradually rise to 7.8% in 2025, remaining below its pre-Covid level. “We are emerging from what was the number one French disease for forty years: mass unemployment,” underlines François Villeroy de Galhau. “Reaching full employment, that is to say going from 7% to less than 5% unemployment, cannot be immediate […]. But it’s realistic in a few years. »
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