By Leigh Thomas
PARIS -France posted its strongest growth in over five decades last year, hitting 7% as the euro zone’s second-biggest economy bounced back from the COVID-19 crisis faster than expected, data showed on Friday.
Despite a resurgence of COVID-19 underway, the strongest boom in a generation bolsters President Emmanuel Macron’s economic credentials less than three months from an April election in which he is widely expected to run for a second term.
The economy grew 0.7% in the final three months of the year after a particular strong third quarter when it grew 3.1%, the INSEE statistics agency said in a preliminary report.
Economists polled by Reuters had on average forecast fourth quarter growth of 0.5%.
The better-than-expected end to the year meant the economy grew 7% in 2021 as a whole, the strongest since 1969, after an 8% contraction in 2020 when strict coronavirus lockdowns were in force.
“The French economy has rebounded spectacularly and that’s erased the economic crisis,” Finance Minister Bruno Le Maire said on France 2 television.
“There are still some sectors that are still having trouble, like tourism and hotels, but most are recovering very strongly and that’s creating jobs.”
Businesses and consumers are once again having to contend with tighter health restrictions as France faces its fifth wave of COVID-19, which has pushed new infection levels to record levels.
While the economy is starting 2022 on a softer footing, the central bank has said the economic impact of the current wave should be minimal as the economy has largely adapted to living with a pandemic.
“All told, the economic stage is set for April’s presidential election. Emmanuel Macron will clearly be pleased with the 2021 GDP numbers,” Capital Economics senior Europe economist Jessica Hinds said.
“But whether Macron can convince the French electorate to give him another five years is still not a done deal,” she added.
Macron currently has a comfortable lead over the closest contenders from the conservatives and far right who are trying to push identity politics and security to the fore in the election where Macron is much less at ease.
INSEE said that the economy had recovered to pre-crisis levels of activity in the third quarter as a vaccination campaign gained momentum and the government eased COVID-19 restrictions.
In the fourth quarter, growth was driven by consumer spending rising 0.4% even though it slowed from an exceptionally strong 5.6% jump the previous quarter as the economy re-opened after a lockdown.
Business investment rose 0.8% in the fourth quarter after gaining only 0.1% in the previous three months.
Growth was also boosted by companies replenishing depleted inventories, with stock-building adding 0.4 percentage points in the fourth quarter after representing a 0.7% drag in the third quarter.