The third national confinement announced on March 31 will not start the recovery, according to the Banque de France. Thanks to a slightly better than expected first quarter, and above all to the now well-anchored resilience of companies in the face of health measures, the monetary institution is maintaining its outlook for the year. “If the current additional restrictions do not extend beyond May, we confirm our forecast of growth above 5% for the whole of 2021”, said, Monday April 12, to World Governor François Villeroy de Galhau.
This forecast “Relatively cautious”, according to M. de Galhau, is in the same range as that of Bercy. Following the announcement of the reconfinement by Emmanuel Macon, the Minister of the Economy, Bruno Le Maire, had revised downward the macroeconomic scenarios. Initially estimated at 6%, the growth outlook for the whole year has been lowered to 5%, according to an estimate qualified by “Sincere and prudent” by Bercy. On April 6, the International Monetary Fund, for its part, published a growth forecast of 5.8% for France, above the average for the euro zone, whose growth should stand at 4.4%. “The French economy will do better than the euro zone average in 2021”, adds the governor.
The first trimester “Reinforces the planned trajectory”, according to Mr. Villeroy de Galhau: in March activity was down 4% compared to normal, after -5% in February, which should allow growth to be achieved “Slightly positive” over the first three months of the year.
Businesses have learned to operate in this environment
The Banque de France relies on the monthly business survey to explain why the annual forecasts have not been revised downwards, despite the ramping up of health measures. First limited to 16, then to 19 departments in March, they were generalized to the whole territory, at the beginning of April, and were accompanied by the closure of nurseries and schools – which had not been the case in November 2020.
According to the expectations of the 8,500 business leaders questioned in the monthly economic survey, April should only result in a slight decline in activity, only 7% compared to the pre-Covid normal. Note, however, that this survey does not include the retail sector, by far the most affected by the restrictions.
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