The Banque de France confirms: the crisis will not be erased in 2021


The year 2020 ended with the worst recession in modern history in France, unheard of since the end of World War II. The fall in GDP will, unsurprisingly, not be offset in 2021: it is the Governor of the Banque de France who says so; and this despite a significant rebound in the economy.

5% growth in 2021? yes … but to put in perspective

Following the publication, on March 8, 2021, of the latest economic forecasts from the Banque de France, François Villeroy de Galhau, its governor, answered a few questions on March 9, 2021 on FranceInfo. He confirms that France should experience, in 2021, one of the growth “ the strongest in Europe “. The Banque de France is indeed counting on growth that would reach at least 5% over one year, unheard of since the 1973 oil shock.

However, despite this good news, we must not forget to put things in perspective: France experienced a GDP drop of 8.3% in 2020, a historic recession. 5% growth in 2021 will therefore not be enough to offset the losses, far from it.

In fact, at the end of 2021 and if the growth forecasts of the Banque de France are confirmed, France’s GDP will still be 3.7% below the level at the end of 2019. It will therefore take at least two years to compensate for the health and economic crisis, which will ultimately only allow France to return to the level of 2019. The French economy will then have lost 3 years: between the end of 2019 and the end of 2022, if all is going well, the evolution of the French GDP will have been zero.

Forecasts subject … to the consumption of French savings

The governor of the Banque de France, like the government, is betting a lot on the cumulative savings of the French in 2020, between 100 and 150 billion euros according to estimates, to boost consumption and therefore the economy.

It is quite possible, judge François Villeroy de Galhau, if there is ” no other reasons for concern that transform this health savings into precautio savingsn, ”he told FranceInfo. A warning for the government, therefore, which must do everything to reassure the French and control the epidemic and its developments.