Despite optimistic IMF forecasts, uncertainty paralyzes French companies

Sunday April 4, Bruno Le Maire reduced the prospect of French growth in 2021 from 6% to 5%. Tuesday, April 6, the International Monetary Fund (IMF) was more optimistic, announcing instead 5.8%, up from the 5.5% still expected in January. Who to believe? Between the two forecasts, eight tenths of a point difference, 48 hours of difference, and, above all, the occurrence of a third confinement for the French economy.

“It is possible that the deterioration of the situation is stronger than anticipated for the month of April, due to new health constraints, but the rebound, thereafter, will be even more dynamic”, also remarks Hélène Baudchon, France economist at BNP Paribas, who maintains her forecast of growth at around 6% in 2021, despite the reconfinement. “In addition, we are missing an important piece of information: the growth rate for the first quarter, which should be slightly positive. “

The IMF itself recognizes that a “High degree of uncertainty” surrounds its projections, which depend – and the French economy is no exception to this rule – on the speed of vaccination on a global scale and the evolution of the pandemic.

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But a “Uncertainty” for economists is becoming a real paralyzing agent for business leaders faced with the crisis. “We have objective reasons to believe it”, recognizes François Asselin, president of CPME, which represents small and medium-sized enterprises in France. “Growth is dynamic in Asia, the United States is benefiting from an incredibly massive stimulus plan … If ever we have a dynamic vaccine policy in France, if ever everything resumes on May 15 as announced, we can hope to have here too strong and sustainable growth. But with if we would bottle Paris… ”

“Job destruction”

Proof that, in the field, the greatest caution remains in order, the French Banking Federation indicated, Tuesday April 6, that more than half of the companies having taken out a loan guaranteed by the State (i.e., to date, nearly 670,000 companies), 94% of which are very small businesses, wanted to postpone the repayment of capital for one year. For Elliot Aurissergues, associate researcher at the French Economic Observatory (OFCE), this uncertainty is one of the biggest threats facing the recovery today.

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