Economic activity has already returned to its pre-crisis level in France – Les Échos

Unheard of for a long time in France. In the third quarter, tricolor growth accelerated to 3%, according to data released this Friday by INSEE. Apart from the exceptional rebound in summer 2020, in the wake of the first confinement, we have to go back to the third quarter of 1968 to find such a sustained pace.

The evolution is much better than expected. Especially since the statistical institute has also revised upwards the country’s growth in the second quarter, at 1.3%, compared to 1.1% announced last August. Auspicious results for the executive which has just raised its growth forecast for 2021 at 6.25%, a level which will very probably be exceeded since the growth overhang for this year is already higher, at 6.6% according to INSEE.

“It is a figure which is beyond our expectations”, welcomed the Minister of the Economy, Bruno Le Maire, a few minutes after the publication of the figure, describing this result as “exceptional”.

Delay limited to 4.4%

After eighteen months marked by ups and downs linked to the Covid epidemic , the GDP thus returns “almost to its pre-crisis level”, whereas Bercy rather counted on the end of the year for such a result.

As after each period of restrictions since the onset of the health crisis, this vigorous recovery can be explained above all by a sharp rebound in domestic demand linked to reopening of hampered areas . From May, household consumption caught up, up 5%. It contributes 2.5 points to GDP growth between July and September and “is thus getting closer to its pre-crisis level, the difference being only 0.9%.

Hotel and restaurant bookings soared 59%, having already jumped 45% in the previous quarter. “This increase alone explains half of GDP growth this quarter,” said INSEE. Activity in this sector is only 4.4% below its pre-pandemic level. The sanitary pass clearly did not hinder the recovery.

Stable investment

Consumption of “other household services” also skyrocketed, up 20.7%. For their part, purchases of manufactured goods increased, but more modestly (+ 1.8%) and even fell back in volume in September.

For its part, business investment remains stable, except for manufactured products (-2%). It remains at a level 1.4% higher than its pre-crisis level. Finally, foreign trade also has good news in store: it made a positive contribution (+ 0.6%) to GDP growth in the third quarter. Exports are accelerating while imports which had jumped with the recovery are stabilizing.

Faced with this recovery more vigorous than expected, Charlotte de Montpellier at ING also welcomed this “nice surprise”. The economist recalls, however, that “the peak of the economic recovery has now passed and economic growth will start to slow sharply in the fourth quarter”.