After a year of historic recession, growth will be limited to 0.75% in 2010, provides for the government. If consumption is expected to resist, despite rising unemployment, business investment will not support the activity.
Prudence, caution ... If the first signs of emerging from crisis are felt, the draft 2010 budget confirms limited growth to 0.75% of GDP next year, which is expected to reach 1970 billion euros. After a severe recession (- 2.25% in 2009), "the economic situation remains fragile," insists the government, for whom "evolution of unemployment may pose, especially in the coming months on the back."
The draft budget projects and a further deterioration of labor market after traders destroyed 580,000 jobs this year (280,000 in the second half), the government still expects to 190,000 destroyed in 2010 (90,000 in all sectors). Despite this environment described as "difficult", he is betting that consumer spending will stall does not: it should grow 0.8% next year, having already survived this year (+0.6%). Household spending will be supported by improved purchasing power (1%), linked to a resurgence of inflation (+1.2%) more than moderate wage increases (+1.9%).
The French economy should also enjoy "a gradual improvement in the international environment" after the collapse of global trade last winter. With an expected growth of 1.1% next year in the United States and 0.8% in Germany, French exports are expected to recover slightly (+2.6% in 2010 collapsed after 11, 4% this year), although the pace of growth will be lower than imports (+3.4% in 2010).
If the end of massive destocking and the effects of recovery plan should support the activity in the coming months, the output will be no recession recovery in business investment. Sacrificed this year (- 7.9%) due to the collapse of the business and profits, it would stagnate (+0.6%) in 2010. "The deterioration in financing conditions, the ongoing debt reduction and a still insufficient level of unfilled orders do not anticipate a restart of the significant private investment," says Bercy. More optimistic than the government on the Growth of GDP (the consensus expects a recovery of 1.1%), economists are more circumspect about the evolution of private investment. The latest "consensus forecast", they expect a decline of 1.2% next year. "The companies reinvest when they have regained their activity level before the crisis, said Karine Berger, director of research of Euler Hermes SFAC. Today, the utilization of production capacity is so low that investment not start again for several quarters. "
A priority of the draft budget is to address this and encourage private investment. But "if the brighter horizon for 2010, any tightening of fiscal or monetary policies would inevitably relapse medium term," warns Pierre-Olivier Beffy, chief economist at Exane BNP Paribas. Anxious to limit the damage in terms of posting on public finances, the government is showing him a return to a relatively strong growth (with +2.5%) since 2011.
Prudence, caution ... If the first signs of emerging from crisis are felt, the draft 2010 budget confirms limited growth to 0.75% of GDP next year, which is expected to reach 1970 billion euros. After a severe recession (- 2.25% in 2009), "the economic situation remains fragile," insists the government, for whom "evolution of unemployment may pose, especially in the coming months on the back."
The draft budget projects and a further deterioration of labor market after traders destroyed 580,000 jobs this year (280,000 in the second half), the government still expects to 190,000 destroyed in 2010 (90,000 in all sectors). Despite this environment described as "difficult", he is betting that consumer spending will stall does not: it should grow 0.8% next year, having already survived this year (+0.6%). Household spending will be supported by improved purchasing power (1%), linked to a resurgence of inflation (+1.2%) more than moderate wage increases (+1.9%).
The French economy should also enjoy "a gradual improvement in the international environment" after the collapse of global trade last winter. With an expected growth of 1.1% next year in the United States and 0.8% in Germany, French exports are expected to recover slightly (+2.6% in 2010 collapsed after 11, 4% this year), although the pace of growth will be lower than imports (+3.4% in 2010).
If the end of massive destocking and the effects of recovery plan should support the activity in the coming months, the output will be no recession recovery in business investment. Sacrificed this year (- 7.9%) due to the collapse of the business and profits, it would stagnate (+0.6%) in 2010. "The deterioration in financing conditions, the ongoing debt reduction and a still insufficient level of unfilled orders do not anticipate a restart of the significant private investment," says Bercy. More optimistic than the government on the Growth of GDP (the consensus expects a recovery of 1.1%), economists are more circumspect about the evolution of private investment. The latest "consensus forecast", they expect a decline of 1.2% next year. "The companies reinvest when they have regained their activity level before the crisis, said Karine Berger, director of research of Euler Hermes SFAC. Today, the utilization of production capacity is so low that investment not start again for several quarters. "
A priority of the draft budget is to address this and encourage private investment. But "if the brighter horizon for 2010, any tightening of fiscal or monetary policies would inevitably relapse medium term," warns Pierre-Olivier Beffy, chief economist at Exane BNP Paribas. Anxious to limit the damage in terms of posting on public finances, the government is showing him a return to a relatively strong growth (with +2.5%) since 2011.
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