When we made our previous estimate in June, we were far from thinking that the second half of the year would see such developments and a resurgence of the pandemic at this level.
As we write these lines, we have no certainty about the next few months in terms of restrictions for the population, although the government has projected a plan for a return to normal conditions assuming a controlled health situation.
However, as for the first wave, the restrictions imposed are having a very strong impact on the economy as a whole. If the summer and the back-to-school period have shown signs of very strong recovery, and moreover at higher levels than expected, the epidemic upturn has unfortunately slowed down this momentum by a second lockdown.
Nevertheless, the government has, to some extent, taken into account the lessons of the first phase, allowing certain activities to continue with the aim of finding the best balance between controlling the health crisis and supporting the economy.
Rationally speaking, this objective seems to be bearing fruit, with a maximum estimated risk to GDP of one additional point in the most pessimistic estimates.
However, once the 2020 milestone has been passed, and even if 2021, with the promises of vaccines early in the year, helps to restore confidence, the return to a normal economic situation will take years.
The risk of bankruptcies, the impact on employment and therefore on household purchasing power, colossal public debt, and a weaker capacity for the state to support the recovery will be on the agenda for 2021.
One of the most credible scenarios of the economic rebound assumes a higher growth in 2021 around 6% and an average annual long-term trend of 2.5% per year.
With this path, France’s GDP would only return to its pre-pandemic level in early 2023.