French economic growth forecast at 4% in 2022

06 Jan 2022

The French economy is forecast to grow 4% in 2022 says Minister for Finance, Bruno Le Maire, and will not be paralysed by the spread of the Covid Omicron variant.

"I am very confident for French growth," Le Maire told Le Figaro newspaper. He added that the Omicron variant will likely only have a “slight” impact on the country’s economy, even though daily infections have been around the 200,000 mark since Christmas. 

The Finance Minister predicts a growth rate of 4% this year, surpassing the 3.6% forecast by the Banque de France in December. He added that growth had hit 6.7% in 2021, over the previous forecast of 6.25%. France’s budget deficit for last year would be a "significantly lower 8% (GDP) than the 8.2% previously projected," Le Maire added. 

In addition, he hinted at the possibility of further tax cuts for industry, in an indication President Emmanuel Macron is again focused on a pro-business platform ahead of April’s elections. Le Maire said the country needs to look at how to further reduce a burden that impacts France’s manufacturing sector compared to other European countries, Bloomberg reports. 

Plans are already in place for a €20 billion reduction in taxes over two years within the Covid recovery program. The Finance Minister also said France should consider how to slash taxes paid by employers to encourage higher-skilled and better-paid jobs: “Our responsibility is to continue to offer you an economic, tax and financial environment that is as favourable to you as possible. Believe me, there’s a lot of work to do and thank goodness, otherwise we’d get bored in the coming years.”   

Moreover, Le Maire stated the government would extend access to aid for businesses impacted by coronavirus restrictions. Businesses can spread out repayments of state guaranteed loans over 10 years rather than six, and delay their first payment until the end of this year, rather than March. 

"The state guaranteed loan managed to save thousands of businesses and we mustn't see them go under when it's time to repay the loan. 

"I have validated all of this with the European Commission, the governor of the Banque de France and the French banking federation, with whom I will sign an agreement early next week," he said.