Government raises growth forecast for 2021 from 5% to 6%

Posted on Jul 13, 2021, 10:05 am

Economy Minister Bruno Le Maire said on Tuesday that the government would revise its growth forecast for the French economy from 5% to 6% in 2021. Confirming a hint given by Emmanuel Macron in his announcements on Monday evening on the recovery of the Kovid-19 epidemic and measures to deal with it.

With this amendment, the executive is now in line with the forecasts of the European Commission and INSEE. In early July, in fact, the French Statistical Institute estimated the French economy’s rebound could reach 6% this year. Banque de France remains slightly less optimistic, with a forecast of 5.75% growth for the current year.

consumption dynamics

Even though contamination figures due to the delta variant have panicked in recent weeks, the government remains optimistic for the months ahead. And so decided to revise its growth forecast for the coming months, relying on full year growth of 6%.

An upward revision that the economy minister explained by an economic recovery that has proved “stronger than expected” in recent weeks. There is a nice surprise that Bruno Le Maire and his services explain from the dynamics of household consumption after the reopening of businesses that qualify as non-essential. According to him, the latest consumption figures available are far higher in 2019 than at the same time before the health crisis.

Call for Vaccine Accountability

However, this rosy scenario can be thwarted by the meteorite progression of the delta version. If, on Monday evening, the head of state refuses to institute new health restrictions such as curfews or the closure of some businesses, as in the past, the 6% growth is likely to be “the only obstacle” ” a sudden and massive return of the epidemic”, warned Bruno Le Maire. “I want to be very clear […] We will be able to achieve this 6% growth only if everyone shows responsibility in terms of vaccination,” he insisted.

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If this 6% increase is confirmed, activity will return to its pre-crisis levels “roughly” by the end of the year, underlined INSEE in early July. Around the same time as Germany, and before the United Kingdom, Italy and Spain.

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