Is there an exception for the French economy in the face of the war in Ukraine? On the occasion of the spring meetings of the World Bank and the IMF which are currently taking place in Washington, the International Monetary Fund published this Tuesday, April 19 its updated growth forecasts for 2022, in which France appears less affected than its neighbors. Europeans by the cascading effects of the Ukrainian conflict. Compared to its January estimate, the organization lowered its forecast by only 0.6 points for France (to 2.9%), against a revision of 1.1 points for the euro zone, and 1 .7 points for Germany.
Germany hardest hit
By way of explanation, the IMF highlights the specificity of certain economies in the euro zone, which are both highly dependent on Russian gas and have a powerful manufacturing sector. This is of course the case of Germany, whose automobile industry has seen its production greatly slowed down by shortages of semiconductors and supply difficulties linked to the war in Ukraine. This Wednesday, the European Automobile Manufacturers Association (ACEA) also published new vehicle sales figures down 20% for the month of March, a level never reached outside of the confinement period.
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“But the gap with Germany is also explained by the early restart of post-Covid French activity, which was marked by a strong recovery in investment, and which made it possible to post a significant gain of growth for 2022 », estimates Stéphane Colliac, economist at BNP Paribas. At the end of 2021, this growth overhang, which represents the increase in GDP over the year 2022 if it remained at the level of the last three months of last year, amounted to 2.4% for France, against 1. 1% for Germany.
An effective tariff shield
In addition, the tariff shield put in place in the fall in France, with the freezing of gas and electricity prices, has made it possible to contain the effects of inflation on the economy. “By even partially protecting households from rising prices, this has preserved consumption, and therefore ultimately growth, at least in the first half of the year”, believes Philippe Waechter, director of economic research at Ostrum AM. In March, inflation was 4.5% in France, compared to 7.5% for the rest of the euro zone.
→ EXPLANATION. The return of inflation, a challenge for economic policies
Today, the whole question is whether these shock absorbers will continue to play a role, when it is now certain that the war in Ukraine will have a significant impact on the entire world economy. In addition to inflationary pressures, which should remain high for a long time, the deterioration of international relations and the rise in social tensions are raising fears of the worst, particularly in emerging or heavily indebted countries.
Added to this, the confinements linked to the Covid in China threaten the Chinese locomotive, in addition to penalizing all the supply chains of the planet. As for the United States, where inflation has reached record levels in recent months, many economists are already expecting a recession following the rate hike announced by the Fed in early 2022.
France will not be spared
“In this context, there is no reason for France to be spared, especially if the ECB also ends up raising its interest rates”, believes Philippe Waechter. According to the IMF, the French economy should also be caught up quite hard from 2023. The institution’s experts are counting on growth of 1.8% next year, against 2.3% for the rest of the zone. euro. “However, these forecasts seem a little pessimistic to us, even though the investment dynamic remains very good, the labor market is buoyant, and tourist activity should pick up quite strongly in the months to come”specifies Stéphane Colliac.
After a rather successful exit from the crisis, it will in any case be quite difficult for the next President of the Republic to navigate in this troubled and uncertain context. “Whoever is elected, he will have to take measures to bring the structural budget back into balance”, believes Philippe Waechter. However, this is not the promise of the two candidates still in the running, whose programs show more expenditure than new revenue. True, the latter were made before the start of the war in Ukraine. But observers have long pointed out that betting on growth to finance a program is such a hazardous and risky bet.
Hiring volume remains at a high level
The number of job declarations older than one month (excluding temporary workers) fell very slightly between January and March (–0.5%), but remained at a high level, at more than 2.4 million declarations for the third consecutive quarter, according to data published by the Urssaf, Wednesday April 20.
By sectordeclarations of hiring rose slightly in industry (+0.6%), contracted in construction (–3.8%) and stabilized in the tertiary sector (–0.2%).
Their level significantly exceeds that recorded in the last quarter of 2019 in industry (+14.3%) and in the tertiary sector (+13%). The difference is much more moderate (+0.6%) in construction, which overall suffered less from the crisis.