Resilience of the French economy: the 8 lessons to be learned from an extraordinary year – economymatin


Crises are instructive moments and 2020 is no exception. Some observations suggest that the French economy could enter 2021 with more assets than one thinks …

1. An economy maintained thanks to unprecedented public support

The French economy is known to be a champion when it comes to taxation. Emmanuel Macron, however, was not the champion of public spending. Whatever, with an unprecedented health challenge, the “whatever it costs”, too, has been unprecedented. Partial unemployment, solidarity funds, loans guaranteed by the State… so many exceptional measures which have enabled the French economy to face the crisis.

A calculated bet for the executive which has always affirmed to prefer a consequent debt to an immediate social breakdown.

2. Business financing maintained at a high level

Corporate financing has remained strong this year. The Banque de France notes an increase in outstanding bank loans of 101 billion euros between the end of February and the end of June 2020. Companies sought liquidity, helped by a fall in the cost of credit and the establishment of EMPs.

Intermediate-sized companies (ETI), which represent 50% of French industrial production, are also doing very well. Their representatives thus affirmed at the beginning of December that ” 60% of them requested an EMP, which many did not finally release and that the majority of the others will reimburse on time “.

3. A flexible economy that has been able to adapt quickly

This year will have twisted the neck of a preconceived idea: the French economy knows how to be flexible. Large companies such as VSEs and SMEs have quickly adapted. Traders converted to ” click and collect », Strict compliance with health protocols, companies switched to telework : the impact of the second confinement was less than that of the first.

According to a survey conducted by the BPI at the end of the year on the morale of the leaders of SMEs, 69% of them declare themselves combative, 74% see opportunities in the crisis and 83% wish to accelerate the development of innovations.

4. French savings: fuel for recovery

Household concerns, on the other hand, were expressed by massive savings. In November, the collection of Livret A and LDDS reached 3.31 billion euros, bringing the total outstanding to 446 billion euros. However, for the first time in a year, withdrawals outnumbered deposits in October. This colossal cash reserve could serve as fuel for the French recovery. A calculated bet for the executive which has always affirmed to prefer a consequent debt to an immediate social breakdown.

5. Very elastic household confidence

This is one of the most encouraging lessons of this extraordinary year: the confidence of the French, impacted by the crisis, only asks to start rising again. The purchasing power of households has also largely been preserved according to INSEE.

If the institute noted an unprecedented drop in their confidence in March, it recorded a rebound from the start of the summer, which was generally stable until October. The indicator gives hope for a rapid recovery of the economy, as soon as the health situation is effectively under control.

6. France’s attractiveness, a lever for recovery

At the start of the year, France achieved attractiveness records according to Business France: the leading host country for foreign investment in Europe, the leading country for industrial investment and the leading host of research projects.

A success based as much on the digital environment, the good level of financing of the economy as an ecological dynamic. Advantages more than ever that can be mobilized to bounce back.

7. Business investment: the good news

Optimism is also placed on the side of the Banque de France which notes at the end of 2020 that “ business investment has fallen less than previously feared “. Its decline between the end of 2019 and the third quarter of 2020 is indeed lower than that of GDP.

A data to be compared with the high level of savings of the French at a time when the government wishes to encourage households to invest in the real economy rather than to garnish their sight deposits.

8. Real estate: a model of resilience

Some sectors have held up better than others, starting with real estate. According to the Notaries of France, the drop in the number of transactions at the end of September stood at… 5%. A feat in a context of a general economic slowdown. The High Council for Financial Stability (HCSF) relaxed its recommendations at the end of 2020 in order to facilitate the financing of first-time buyers.

In October, as in November, it was companies in the real estate and construction sectors that recorded the largest increases in the number of business start-ups: an encouraging signal for a good start to 2021!

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