09 Sep 2021
Despite increasing cases of the Delta variant of coronavirus in France, the economic outlook has improved over summer thanks to the vaccine rollout helping to ease restrictions.
France’s economic activity remained close to pre-pandemic levels in July and August, according to the National Institute of Statistics and Economic Studies (INSEE) confidence surveys and high-frequency indicators, with the economy making a full rally by the end of the year, Bloomberg reports.
In addition, INSEE upwardly revised its economic growth projections for 2021 to 6.25% from 6% in July.
“The really notable fact is that the recovery continued despite going through a fourth wave of the epidemic,” Insee economist Julien Pouget told Bloomberg.
The optimistic report from the country’s statistics agency on the eurozone’s second-largest economy was a positive within the bloc, amid other indicators showing a spike in Covid cases and continual supply issues. Indeed, another survey revealed investor confidence in Germany declined for the fourth straight month.
“Our scenario sees industry and in particular automobile production partly held back by these problems between now and the end of the year,” Pouget added. “That could be a positive element if the tensions unwind in the medium term.”
The government has avoided imposing fresh nationwide restrictions, despite the number of coronavirus cases increasing over the latest summer wave. However, the vaccine campaign has resulted in more than 77% of over-12s now being fully vaccinated.
Moreover, the government launched a health passport at the beginning of August for entry into venues such as restaurants, leisure centres and tourist sites. The passport requires either proof of fully vaccinated status, a negative Covid test no more than 72 hours old, or proof of recent recovery from coronavirus.
INSEE stated the health passport initiative only had a moderate impact that will likely have a temporary effect on the country’s economy.