Immersed in the fog.
Emmanuel Macron's second five-year term begins under severe auspices.
While the unprecedented macroeconomic situation could require great responsiveness from the executive, the legislative elections thwart all the projects of the Head of State.
Texts on purchasing power expected in early July, 2022 budget in preparation, future pension reform… With such a fragmented assembly, the government will have to fight and find unlikely consensus to pass each of these bills.
To discover
Find all the results of the legislative elections
Taxes 2022: all about your tax return
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Inflation, rate, growth: the world on alert
Growth at half mast, historic inflation, over-indebtedness: France cannot yet afford years of stagnation, as recalled by the macroeconomic forecasts of the Banque de France, published on Tuesday.
While no one hopes for a quick resolution of the Ukrainian crisis, the institution has significantly revised downwards its latest projections dating from March.
The total cost of the war in Ukraine for the French economy should indeed exceed 50 billion euros between 2022 and 2024.
Reduction in growth and increase in inflation
The shock of the war spreads to the French economy through two channels: a reduction in growth and an increase in inflation.
In this context, the country's gross domestic product (GDP) should progress by 2.3% this year, before 1.2% in 2023 and 1.7% in 2024. The relative dynamism of 2022 is mainly explained by a of 2021. The Banque de France does not expect anything wonderful for this year.
It is counting on growth of 0.25% in the second quarter, then on a very weak growth rate in the second half.
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Rising interest rates: the Banque de France sounds the alarm
The labor market should withstand this slowdown relatively well, with a slight rise in unemployment by 2023-2024.
Slightly below 8%, the unemployment rate should nevertheless remain above the level recorded in 2019.
As a corollary, inflation, which has spread from the energy or food sectors to the entire consumer basket, should soar to 5.6% on average this year, then 3.4% in 2023 and finally 1.9% in 2024. The increase in prices would cause a decline in purchasing power of 1% in 2022, despite the dynamism of wages and the support measures already in place (tariff shield, the pump, overhaul of the mileage scale) or promised in the future purchasing power law (raising of the index point, revaluation of social benefits, etc.).
The executive had planned to present the two texts presenting these measures to the Council of Ministers in early July, but they are now suspended for parliamentary reconfiguration.
Adverse scenario
On the public finance side, the Banque de France expects a slight consolidation of the accounts in 2022, then a stabilization of the deficit and debt ratios in 2023 and 2024. The deficit would remain above the 3% of GDP threshold of the European treaties, while that the debt
“would stabilize a little below 110% of GDP in 2023-2024”
.
This projection reveals the relative optimism of the central bank as to a stabilization of interest rates over this horizon, while French bonds at ten are trading at the start of the week at 2.3% against -0.1% at the end of last year.
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The explosive equation of public debt and deficit
Cautious, the Banque de France also presents an unfavorable scenario, to take into account a risk of accelerating tensions on the energy and food markets.
In this scenario, GDP would grow by 1.5% in 2022 before falling by 1.3% in 2023.
