France will remain marked by the crisis - June 19, 2010
The French economy could be structurally affected by the crisis. In any case believes that INSEE detailing today its scenario medium-term growth in France. The French institute of statistics suggests that the gross domestic product (GDP) of France should not catch up in time of crisis. The INSEE estimates that France will find the pace of growth before the crisis but only part of the "lost ground" will never be caught.
INSEE said that the crisis "is a major macroeconomic shock," and can "have a lasting negative impact on employment, capital and total factor productivity. It tends to depress simultaneously the demand and supply. And according to the institute, the loss of revenue during the crisis and higher interest debt will weigh on the public debt and growth.Several scenarios are examined by the specialist statistics in France. The ratio of debt to GDP would increase by 40 percentage points of GDP by 2018, in the absence of debt reduction.
And INSEE said "the impact of different scenarios of loss of gross domestic product on public debt is raised to 2018, between 20% and 50% of GDP depending on assumptions. Didier Blanchet, head of economic studies, however, said "it is not a prediction, but a hypothesis.
Structural deficit gradient
The evening, Jean-Philippe Cotis, Director General of INSEE had said "the crisis has cost France, hopelessly, about 3 percentage points of GDP in tax revenue and social. Growth restarts quite normally, but it remains a scar.He said the structural deficit of public finances has deteriorated and 3 percentage points of GDP permanently and governments will have to correct this imbalance.
The IMF is no more optimistic
The International Monetary Fund (IMF) was little more optimistic yesterday. In its annual report on France, the institution considers that the recovery will remain "fragile" and the outlook "highly uncertain". According to the IMF, the government may have underestimated the significant budget reduction efforts to be made to return to 3% public deficit.