The economic horizon of the Hexagon shows dark clouds and an unprecedented storm… but it would have dropped in intensity, at least a little bit. In its latest forecasts, the Ministry of the Economy is counting on a fall in GDP that is lower than it expected… but which remains the worst in modern history. Bercy is also more pessimistic than the Banque de France.
A recession that will be 10% in 2020
So far, the Ministry of the Economy had aligned itself with international forecasts on the recession that will hit France in 2020: it was forecasting a drop of 11% of the country’s GDP in 2020. But it would seem that that get a little better: the latest forecasts, released by the government on Wednesday, September 16, 2020, show a forecast of a 10% drop in GDP in 2020. A level which remains unprecedented since the end of the Second World War… but which is a little less worse than expected.
Bercy is more pessimistic than the Banque de France which, the week of September 14, 2020, raised its forecasts from a recession of more than 10.3% to a recession of 8.7% in 2020.
And, of course, with this relative good news, everything has been revised upwards: the public deficit will increase 10.2% of GDP while the public debt is expected to be only 117.5% of GDP in 2020 (against 120.9% expected previously).
The crisis will be erased in 2022!
The good news is, however, the economic recovery, which continues to be debated among specialists. It seems that Bercy expects a recovery “in V”, an increase in GDP just as extraordinary in 2021 as the fall of the latter in 2020. From now on, Bercy forecasts a growth of 8% for 2021, a record.
If it is confirmed, the situation is still very uncertain, the government hopes that the economic crisis will be completely erased by the end of 2022, when the GDP will have returned to its level of the end of 2019.
Unless the coronavirus puts the sticks in the government’s wheels … once again. Bercy concedes that the health situation in France “is not as favorable” as what was expected for the last quarter of 2020 … and it continues to worsen in France as elsewhere in the world.