“The picture today is one of worrying inflation, but
solid growth
despite Omicron.
Within two years, however, concerns should be reversed: inflation would normalize around a “new regime” close to our
2% target.
Conversely, growth would fall below 1.5%
,” explained the Governor of the Banque de France last week.
According to François Villeroy de Galhau, a surplus of 0.5% in potential growth each year would get Paris out of many worries.
See also
Omicron: inflation and health uncertainty are weighing on global growth
What are we talking about?
With this indicator of potential growth, economists try to understand the "real" health of an economy, beyond the economic effects.
Potential growth is then defined as the volume of production of goods and services that an economy can sustainably achieve by fully utilizing its capacities.
Before the 2008 crisis, the potential growth of the French economy was around 2% and, in 2018, Bercy estimated that it…
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