France: the extent of the rebound in the economy in the spring known on Friday

INSEE will publish its first estimate on Friday of the extent of the rebound in the economy in France in the second quarter, when fears resurface with the fourth wave of the epidemic.

In its latest forecast in mid-June, the National Institute of Statistics estimated the growth in activity between April and June at + 0.7%, after the decline of -0.1% in the first quarter and the record recession of 8% last year.

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The Banque de France, in early July, forecast an increase in gross domestic product (GDP) of 1% in the second quarter, much more optimistic than its previous forecast of + 0.5%, made a month earlier. And this despite three checkered months, marked both by the health restrictions of April, then their gradual lifting from mid-May. Since then, activity has picked up sharply, notably with a rebound in household consumption.

Retail sales, for example, rose sharply in May and June, in the wake of the reopening of all stores, in particular in clothing and sports equipment.

"

We have many rather favorable indicators which show both a catching up after April, and probably a momentum a little beyond simple catching up,

" said Philippe Waechter, chief economist at Ostrum Asset Management.

Promising climate

The French economy is also driven by a "

very strong international dynamic

", he adds.

In addition to the lifting of restrictions, "

the acceleration of vaccine campaigns has fostered renewed confidence in the French private sector

," said Joe Hayes, economist at IHS Markit, in a note devoted to French activity in June.

Read also: France is still waiting for its economic rebound

Household morale assessed by INSEE thus reached its highest level last month since the start of the crisis, while the business climate, which estimates the state of mind of business leaders, was also looking good, at a level not seen in 15 years. “

Our economy is recovering quickly. Our economy is recovering strongly

”, welcomed the Minister of the Economy Bruno Le Maire to the National Assembly on July 15, shortly after raising the government's growth forecast to 6% for 2021 as a whole. 'thus aligned with those of INSEE and the European Commission.

Unsurprisingly, the service sector, more affected by health restrictions, should have clearly recovered in the second quarter.

Industry and construction should also have continued to recover, although their activity could start to suffer from supply and recruitment difficulties.

The "

historic peak

" in hiring and the drop in the number of unemployed in the second quarter (-1.3%) are all signs that the recovery is here.

Concerns about the Delta variant

"

The major question for the second quarter will be the profile of corporate investment

," warns Philippe Waechter, for whom "

it is a key element of the recovery

".

"

Once the catch-up effect is over, the dynamic of innovation and investment must be strong enough to continue to support the economy and allow the creation of jobs and income,

" he explains. to AFP.

Confidence then plays a crucial role.

However, the spread of the Delta variant and the introduction of the sanitary pass to slow it down are giving rise to fears that the recovery will be stalled in certain sectors.

Read also: Fourth wave: in France, nothing has yet been won

Nothing to

worry about the government: "

The health pass should not affect the turnover of the sectors concerned, which we also continue to support throughout the summer thanks to the solidarity fund

", assured Bruno Le Maire. . The governor of the Banque de France François Villeroy de Galhau also estimated that "

the extension of the health pass, if it leads to an extension of vaccination, should even rather consolidate growth

".