The increase in energy, food and services prices will have an impact on household consumption, but also on business activity.
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In France, the recession will wait a little. It is in any case the bet that the forecast institutes make, which do not see a frank reversal of the economic situation before the end of 2022, even 2023. “The growth target of 2.5 % for 2022 is still achievable, estimates Mathieu Plane, deputy director of the Department Analysis and forecasting of the French Observatory of Economic Conditions (OFCE). Growth slows down, but it does not flank. “
The French economy has displayed, since the beginning of the year, a form of resilience, in a very degraded international context. The gross domestic product (GDP) believed 0.5 % in the second quarter, after a decline of 0.2 % over the first three months of 2022, marked by the start of the war in Ukraine on February 24. Thanks to the price shield, inflation remains, in France, more contained than elsewhere in Europe: prices have increased by 6.1 % over the last twelve months in July, which makes almost the best pupil of the country the euro zone, after Malta.
The concern fueled by central banks on the risk of generalized recession seems to have little grip on the business climate. Despite a slight decrease in August, it remains greater than its long period of time. “This return to school is special because the activity is quite good; 80 % of the bosses are rather optimistic,” even assured the president of Medef, Geoffroy Roux de Bézieux, to meet the entrepreneurs of France, the reunion of the entry of employers French, Monday August 29. This is one of the current paradoxes: although inquire about the rise in energy prices, companies do not yet see the wind turning.
surprising dynamism of the labor market
How to explain the maintenance of morale of business leaders? Mr. Plane provides three elements of response: “We have seen very few bankruptcies since the start of the crisis, the financial conditions have been rather favorable and the order books are rather well fulfilled.” In short, the problem of companies was “Rather to be able to produce than find customers”, all on a labor market which continues to display a surprising dynamism, despite the slight increase in unemployment recorded in July.
Households are less darying. Faced with the shock of inflation, they reduced their expenses in the first half, while consumption is one of the main drivers of growth. Over the first six months of 2022, this position degraded the growth of GDP of 0.8 points, according to the calculations of the OFCE. The summer season could compensate for this sluggish start to the year. “We believe that growth will be positive in the third quarter, in particular thanks to the good health of tourism,” said Maxime Darmet, economist for France at Allianz Trade. On the other hand, “the fourth trimester promises to be much less favorable”, he nuance.
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