Covid-19 econ

French economy on target for 5 percent growth in 2021, says central bank boss

Bank of France Governor, François Villeroy de Galhau.
Bank of France Governor, François Villeroy de Galhau. AP - Michel Euler

The French economy will rebound strongly this year following a deep recession sparked by the Covid-19 epidemic, according to the country's central bank chief. 


Economic growth will reach at least five percent in 2021, Bank of France governor François Villeroy de Galhau told France Info radio on Tuesday, a forecast which confirms a prediction the bank made in December.

"The recession is behind us," he said.

French GDP slumped 8.3 percent in 2020, national statistics bureau Insee estimated in late January, saying that the downturn had turned out to be less brutal than originally forecast.

A massive drop in consumer spending explains much of the 2020 decline, but investment and foreign trade have held up well, according to the Insee report.

France to boast one of Europe's strongest growth rates

The central bank boss says France will show a level of economic growth well above the European average

The government has predicted that growth this year could well be of the order of 6 percent.

Villeroy de Galhau says the French economy is moving into a second phase of recovery, which he expects will last for about 12 months.

"We are on a sort of plateau and, with fewer accidents, are likely to go on slowly climbing out of the current depression," he said.

The central bank governor says he expects the French economy to be back to its pre-Covid level by spring or summer 2022, a rebound from a current situation which is 5 percent below pre-crisis growth rates.

Consumer confidence crucial

A lot will depend on consumer confidence, the central bank governor added, stressing that, once the health restrictions are lifted, state support for the economy will have to be picked up by private expenditure.

The central bank chief bases his confidence on the fact that public sector investment and employment have resisted the crisis better than expected, given that the Covid-19 crisis caused the French economy to recede by an unprecedented 8.2 percent in 2020. 

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