Bercy anticipates a 10% drop in GDP in 2020, then a rebound of 8% in 2021

Paris, January 28, 2013. Illustration facade of the ministry of finance. Bercy. French flag. – A. GELEBART / 20 MINUTES

The government, a little less pessimistic on the amplifier of the crisis, now expects a 10% drop in GDP this year, down from 11% previously, said
Wednesday the Ministry of the Economy. The public deficit is expected to widen a little less than expected to 10.2% of GDP this year (against 11.4% expected so far), before falling to 6.7% next year under l. effect of the return to growth, said Bercy, which is banking on a rebound of 8% in 2021, driven in particular by the
Recovery plan.

As for the public debt, it should swell to 117.5% of GDP this year, a little less than the 120.9% anticipated previously, before falling slightly to 116.2% next year.

A rebound in consumption and industrial production during the summer

“At the end of 2021 the French economy will be only 2.7 points” from the level of GDP at the end of 2019, before proceeding with the Covid-19 epidemic in the country, underlined the Ministry of the Economy during an exchange with journalists. A gap closely monitored by the government, which has set itself the objective of returning to the pre-crisis level by the end of 2022.

According to Bercy, the crisis will be less severe this year due to a slump in activity less than anticipated during the second quarter, marked by containment, but also thanks to the rebound in consumption and industrial production during the ‘summer.

This resumption of activity will limit the fall in tax and social revenue, which leads to the public deficit and the debt to widen a little less than expected this year, even if since this summer new expenses had to be taken into account (Ségur de la santé, new cancellations or deferral of charges, part of which may never be reimbursed, etc.).

A 2021 budget unveiled on September 28

However, the government has chosen to maintain its forecast for a rebound in GDP next year. Because if he has revealed in the meantime his recovery plan of 100 billion euros, a third of which must be spent in 2021, the health situation “is not as favorable” as what had been projected, we told Bercy. Added to this are international uncertainties, in particular the complicated negotiations on Brexit or the American elections.

These macroeconomic forecasts will be returned to the High Council of Public Finance, which will give an opinion on the scenario adopted by the government to establish its draft budget for 2021. This will be unveiled on Monday, September 28.

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