A new report on the French economy suggests that it has bounced back quickly since the pandemic. We take a look at why this is and if there are any uncertainties on the horizon.
The latest survey from the Organisation for Economic Co-operation and Development (OECD) reveals that government support measures, the acceleration of the vaccine campaign and the lifting of health restrictions have supported economic recovery. It adds that economic activity returned close to pre-pandemic levels in the third quarter of this year, despite a further wave of COVID-19 cases in the summer.
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The job retention scheme was highlighted as effective in reducing the economic fallout from the pandemic as the drop in employment was limited and the take up of the scheme was high. The report also found that lockdowns were associated with a sharp increase in household savings. Domestic demand was cited as driving the recovery.
The report also predicts that GDP growth will be around 6.8% in 2021 and 4.2% in 2022. This is good news for anyone who wishes to move to France in the near future. However, the report also noted some areas that need improvement.
Room for improvement
For example, although the acceleration of the vaccine campaign helped economic recovery, it notes that vaccine coverage was significantly lower in deprived areas and lower than the European average for over 80s.
The report also says that the pandemic has highlighted a number of weaknesses in the French economy, including inadequate digitalisation in small and medium-sized companies and a mismatch between the skills of the labour force and the needs of employers. It also revealed that employment amongst young and older people is weak.
Speeding up the ‘green transition’ was highlighted as something that France should continue to help economic recovery. The government has allocated €30 billion to the ‘environmental transition’ and the report notes that private investment, improving the energy efficiency of buildings and an increase in the production of renewable energies must increase in order for the ‘green transition’ to accelerate.
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Housing market trends
The OECD’s report also details property market trends. It notes that the increase in real house prices since 2015 has actually been lower than the average for the euro area. However, in 2019, France was already the most expensive market amongst major European Countries.
What does this mean for expats?
For those who have recently moved to France or plans to in the near future, this report is encouraging. However, it notes, its GDP projections for next year are dependent on a number of unknown factors, including the pandemic.