ECB’s Villeroy: If Restrictions Don’t Outlast May, See French 2021 GDP Growth Over 5%

13 April 2021

By David Barwick – FRANKFURT (Econostream) – Provided pandemic containment measures are not extended beyond next month, French GDP growth this year should top 5%, European Central Bank Governing Council member François Villeroy de Galhau said Tuesday.

In an interview with French public radio channel France Culture, Villeroy, who heads the Bank of France, said, ‘If the current additional restrictions do not last beyond May, the French economy should grow by more than 5% over the whole of 2021.’

‘In industry and construction, the sanitary protocol is working’, he said. ‘Two sectors are in retreat: the automobile and aeronautics sectors. This crisis is rather concentrated on services.’

Business services are holding up, in contrast to personal services most directly affected by public health measures, he said. ‘But overall, the French economy is resilient.’

A month ago, the French central bank called for the domestic economy to expand by 5.5%, a clear increase versus the December forecast of ‘around 5%’. Villeroy at the time called the 5.5% figure ‘quite conservative’.

However, a resurgence of case numbers since then has led to a tightening of restrictions in the euro area’s second largest economy.

Real GDP in the entire area was forecast last month by the ECB to grow 4.0% this year and 4.1% next, before cooling down to 2.1% in 2023.