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French economy to rebound to pre-crisis levels by 2022, minister says

Published 2020-07-23, 04:33 a/m
© Reuters. FILE PHOTO: Handover ceremony at the Bercy Finance Ministry in Paris

PARIS (Reuters) - The French economy is on course to rebound by 8% next year and should return to pre-crisis levels by 2022, French Finance Minister Bruno Le Maire said on Thursday.

Le Maire told the National Assembly recent economic data had been "satisfying but too fragile" for now to change forecasts for an economic contraction this year of 11%, the worst since modern records began.

"I won't resign myself to a -11% recession. If we step up the measures that we have already decided and make sure they are implemented well, we can do better than -11% in 2020," Le Maire said to open a debate on the public finances.

The government has committed more than 460 billion euros ($533 billion) in public funds to supporting the economy. Most will come in the form of state-guaranteed loans and tax breaks to help companies cope with a slump in business.

Le Maire is drafting a recovery plan worth more than 100 billion euros to be presented on Aug. 24, aimed at bringing the euro zone's second-biggest economy back to pre-crisis levels.

Le Maire said that while he forecast a rebound in growth of 8% next year, the outlook was particularly difficult to project and depended in part on the depth of the recession this year.

"My objective is that we are able from 2022 to return to a level of growth and national wealth comparable to that before the crisis," Le Maire told lawmakers.

The government put France under one of the strictest lockdowns in Europe in mid-March, shutting down vast swathes of the economy.

Activity has steadily picked up since lockdown restrictions began to be lifted on May 11, although businesses such as hotels relying on foreign tourists continue to suffer.

© Reuters. FILE PHOTO: Handover ceremony at the Bercy Finance Ministry in Paris

The INSEE official statistics agency said on Thursday business confidence gained further ground in July, though it remains far from pre-crisis levels.

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