Le prix de l’inflation. Perspectives 2023-2024 pour l’économie française

The post-Covid recovery has been severely hampered by a number of events, starting with the impact of Russia's invasion of Ukraine. The energy crisis, the return of the spectre of inflation, international tensions and supply difficulties, the sudden rise in interest rates... this series of shocks is likely to cut GDP growth by 3 points over the next three years, despite the fiscal steps taken. Although the fall in energy prices since the peak in the summer of 2022 should make it possible to avoid an official recession, France?s economy is nevertheless expected to grow by only 0.8% in 2023, as it continues to suffer from the monetary and energy shocks. In 2024, assuming relatively stable energy prices and no major financial crisis, GDP growth should be 1.2%. A pickup in activity will be cut back mainly by the diffusion of higher interest rates and a more restrictive fiscal policy. Driven by food prices, inflation is expected to remain high until the end of 2023, fluctuating between 5.5% and 6.5%. It will start to ease only from 2024 onwards, converging towards 3% by the end of next year. Overall, CPI inflation should rise by an average of 5.8% in 2023 and 3.8% in 2024. Purchasing power per consumption unit is likely to fall by 1.2% over the period 2022-2024. By 2024, it should return to a level close to that of 2019, despite the tax measures taken. The household savings rate, still almost 3 points above its 2019 level at the end of 2022, should converge towards its pre-crisis level by the forecast horizon, thereby supporting consumption. The ?excess savings? accumulated since the start of the Covid crisis will represent 12.6% of households? annual income, excluding the inflationary wealth tax, by the end of 2024. Business sentiment contrasts with the historic external deficits. However, the lower level of inventory restocking and the expected stability in the rate of investment, coupled with a partial recovery in market shares, notably with the improved situation in the aerospace industry, should enable foreign trade to make a positive contribution to growth over the coming quarters. The year 2023 should see a turnaround in the labour market, with the unemployment rate rising from the second half of the year onwards as apprenticeships decline and working hours rise. We expect 101,000 job losses between the end of 2022 and the end of 2024, and an unemployment rate of 7.9% at the end of next year (compared with 7.2% at present). However, labour productivity is not expected to return to its pre-crisis trend by the end of 2024, revealing a productivity cycle that is still well entrenched. At 4.7% of GDP in 2022, the public deficit is lower than forecast in the 2023 budget bill, and it should fall slightly as the health and energy measures are gradually phased out, to reach 4% of GDP in 2024. The ratio of public debt to GDP is set to fall from 111.6% in 2022 to 107.8% in 2024, with the latter benefiting from vigorous nominal GDP growth and a marked rise in GDP prices. In accounting terms, high inflation pushes up the level of the deficit, which stabilises the debt in GDP points, thereby lightening the debt burden.