It is not quite the dreaded recession yet, but perhaps the foreshadowing of an annus horribilis in 2023 for the French economy.
According to the latest INSEE economic forecasts, published on Wednesday 7 September, growth for 2022 should be 2.6%, with the third quarter set to be sluggish (+ 0.2% growth instead of + 0.3% expected before summer) and the weak quarter (+ 0.0%, instead of + 0.3%). A strong brake after the rebound of 6.8% in 2021, and above all a more than modest momentum at the beginning of 2023. At this stage, the growth spurt for next year is only around + 0.2%.
And again, these forecasts for France are part of a “central” scenario, as recalled by Julien Pouget, responsible for the economic situation of INSEE. In other words, things can go better than expected, but they can also go downhill. Given the energy unknowns and rising interest rates, a contraction in gross domestic product (GDP) in the last quarter – thus marking the first step towards recession, which requires two consecutive quarters of decline – “It is not excluded in the event of an increase in energy supply difficulties in Europe”, Insee admits. We will have to take into account other dangers, geopolitical, health or even climatic. “The risk of recession is increasing”for his part warned, during a speech in Brussels, the European Commissioner for the Economy, Paolo Gentiloni. “We could very well enter one of the hardest winters in generations. “
At the beginning of the 2022 school year, it is above all production tensions – supply problems, shortages, lack of manpower – that weigh on activity and keep inflation down. The slight decline in prices recorded in August, when the rise in prices in the last twelve months fell to 5.8% instead of 6.1% in July, should only be temporary. Inflation would be 6.6% at the end of December, according to INSEE. The figure would be much higher without the price shield, which reduces the price increase by 2.5 points. On average over the year, prices will have increased by 5.3% in 2022, compared to 1.6% in 2021.
Little room for other expenses
Above all, inflation, which at the beginning of the year mainly affected energy, is spreading more and more in all sectors of the economy, and in particular in the food sector. The increase in prices on supermarket shelves could approach 12%, announces INSEE, while manufactured goods will register an increase of about 5%. Now food is the main culprit for rising prices in France, thus doubling energy. an epidemic “ this is due to the increase in producer prices “, Explains Pouget, whether it is directly agricultural prices or the price of the energy needed to process, store or transport food. In one year, producer prices increased by 35% in the agricultural sector, by 20% in industry and by 7% in services.
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