ECB’s Villeroy: Vigilant But Confident About 2021 5.75% French GDP Growth Forecast

30 June 2021

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member François Villeroy de Galhau said Wednesday that he was optimistic about the outlook for French economic growth this year even in the event of another round of pandemic containment measures.

In an interview with French radio station Europe 1, Villeroy, who heads Banque de France, said that the French central bank was ‘vigilant, but we remain confident’ about its 5.75% growth projection for 2021, a full 0.75 point greater than the government’s forecast.

‘But we are confident, because when you look at the last 15 months, each wave of health restrictions has had increasingly limited economic effects’, he said. ‘So our forecast should not be significantly affected even if there is another round of restrictions in the future.’

Vaccination was nonetheless absolutely necessary and the best protection against the delta mutation of the coronavirus, he said.

Villeroy declined to account for the difference with the government forecast. ‘Our forecast of 5.75% is reasonable’, he said. The central bank’s projection was ‘done in full independence from the government, like everything we do.’

In its latest business survey of more than 8,000 companies, Banque de France saw ‘that activity should be back to only a 3% loss compared to the pre-Covid level’, he said. ‘And so when we extend the trend, we should be back to the pre-pandemic level by early 2022. So a bit earlier than expected.’

‘Everything we've seen since then on household consumption, on business investment is going in this direction’, he added. ‘Of course, there are variations between sectors.’