“The strategy of“ whatever the cost ”, coupled with the 100 billion of the recovery plan […] enabled us not only to resist the crisis, but to bounce back stronger today ”, assured Emmanuel Macron during his televised address on November 9. In the study they published Tuesday, November 16, economists from the Institute for Public Policy (IPP), an independent research organization, share the observation of a “Impressive speed of the way out of the crisis, despite an enormous shock” due to the pandemic, as summarized by Antoine Bozio, the director of the IPP. Neither the wall of bankruptcies nor the waves of layoffs for a time dreaded marked the end of the crisis.
However, the explanation for this good news remains complex. “What is certain is that without the government’s support and stimulus measures, the end of the crisis would have been postponed by more than a year”, says Mr Bozio. It would then have taken more than five additional quarters for France to return to the pre-crisis level of GDP, which the economy has just reached in the third quarter of 2021. The researchers are not, however, in a position to say whether the government did too much or not enough, or what would have happened if he had calibrated his devices otherwise.
On the other hand, the debt would have increased more as a percentage of GDP without these supports. “We would have had a debt explosion to 126% of GDP, against 115% today. At a time when we are debating a consolidation of public finances, we must not forget that the choice to resort to exceptional measures to limit, in fine, the debt ratio, was rational ”, says Mr Bozio. Likewise, the massive use of short-time working turns out to be less costly than a strategy where the government has decided to allow unemployment to increase, notes the study.
For the rest, the models of economists are also optimistic. “Once the aid measures are withdrawn, the dynamism of the economy means that it is very likely that the jobs created will remain”, says Mr Bozio. The employment rate (the number of active workers compared to the working-age population) is today higher than that of before the crisis, and even that of the two previous five-year terms of Nicolas Sarkozy and François Hollande. And average GDP growth should accelerate: from 1.2% per year between 2009 and 2017, it should increase to 1.35% between 2017 and 2025. There are therefore no signs of weaker growth for the moment. , unlike what happened at the end of the 2008 financial crisis, note the authors.
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