Questioned on LCI, the boss of bosses estimated Tuesday that France is “in recession”.
“There is no longer a single engine of growth that is on,” argued Patrick Martin.
Although growth forecasts for France are gloomy, the country is not in recession.
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He sounded the alarm at the beginning of the month. In an interview published on December 8, the president of Medef affirms that France is “already in a slight recession”. A position repeated this Tuesday, December 17 on LCI. Questioned on this subject, Patrick Martin indicated that at present, he “think” that the country is already “in recession”. A position that he shares, however, with great caution. So we wanted to know more.
“Modest” growth
A country is considered to be in recession when it records “a decline in gross domestic product (GDP) over at least two consecutive quarters”explain (new window) the Institute responsible for statistics and economic studies (Insee). Although growth forecasts for next year are very low, this decline in economic activity has not yet occurred in France. In its latest economic report published Tuesday (new window)INSEE forecasts that GDP growth will stall in the fourth quarter of 2024, standing at 0.0%, then “would grow weakly” at the start of next year. It would not exceed 0.2% in the first and second quarters of 2025. But for this year, it still expects growth of 1.1%, as in 2023. At this stage, France is therefore not, technically , in such a situation.
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This is why the institute, like the Banque de France, is quite cautious when analyzing the country’s economic situation. For INSEE, “growth achievements” will remain “modest”by mid-2025. As for the Banque de France, its scenario for the years to come remains that “an exit from inflation without recession”, according to its monthly survey (new window)published on December 10. Based on the analysis of the 8,500 companies that responded to its survey, it estimates that “Underlying activity should maintain its slightly positive progression trend in the fourth quarter.”
Forecasts “surrounded by uncertainties”
Note, however, that in both cases, these projections published in December have a bias which tends to make them more optimistic than they could be. These forecasts were both made from surveys collected in November. That is, before government censorship. The new uncertain political context”is likely to modify the behavior of economic actors”, which could threaten growth, by INSEE’s own admission. As he summarizes in his analysis, the economic situation of France “remain gloomy”. We will therefore have to wait for the publication of these updated indicators in order to conclude whether, yes or not, the country has indeed entered into recession.
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