La récession du Covid-19 en France : Le creux est derrière nous, mais restons vigilants </p><div> <p>Le comité de datation du cycle économique du National Bureau of Economic Research (NBER) a déclaré en juillet 2021 que l'économie américaine est sortie de la récession de Covid-19 en avril 2020, après avoir connu un pic deux mois auparavant (NBER 2021). Il s'agit de la période de récession la plus courte depuis 1857, date à laquelle le comité a commencé sa chronologie. Qu'en est-il de l'économie française ? Peut-on désormais considérer que la récession du Covid-19 est derrière nous ?
According to the French economic cycle dating committee, recently created under the aegis of the French Economic Association (Aviat et al. 2021), we can answer this last question positively. Recall first that the economic cycle is defined as the sequence of periods of increasing economic activity (expansions) followed by periods of decreasing economic activity (recessions). These periods are delimited by peaks (highest level of activity) and troughs (lowest level of activity), corresponding to turning points in the economic cycle (Ferrara and Mignon 2021a).
The main difficulty turns out to be the exact identification of peaks and troughs, as economic cycles are not directly observable. In this regard, various statistical and econometric approaches are generally used. The methodology adopted by the French committee for dating economic cycles is based on two pillars: (i) a quantitative pillar based on econometric approaches aimed at evaluating the “3D” rule (duration, depth and diffusion); and (ii) a qualitative pillar based on a narrative approach (claims of the experts forming the committee).
The bottom of the cycle was reached in Q2 2020
At the end of its meeting on October 25, 2021, the committee selected the second quarter of 2020 as the low point in the Covid-19 business cycle (Ferrara and Mignon 2021b). If this conclusion seems trivial, it is not necessarily the case given the great uncertainty that still reigns. Given the unusual characteristics of the Covid-19 recession, and in particular the “health dominance” which has led to more or less severe blockages, the committee decided to wait to collect sufficient macroeconomic information. Successive pandemic waves could indeed have shifted the course of the economic cycle well after 2020Q2. Typically, it turns out that business cycle dating committees take much longer to identify lows (e.g., 15 months on average for the NBER; see Ferrara 2020) than peaks (only seven months on average for the NBER; see Ferrara 2020). NBER). The main reason is that there is always a non-zero probability of a “double dip” that needs to be assessed. The CEPR-EABCN dating committee for the entire euro area also made its trough announcement in November 2021 (CEPR 2021).
The French economy experienced a strong rebound in the third quarter of 2020. Although this dynamic was quite mechanical just after the bottom of the recession, GDP growth was close to zero on average over the three consecutive quarters, even posting a value negative in the fourth quarter of 2020. However, the confirmation of the recovery in the summer of 2021 (according to the latest data from INSEE (2021), quarterly GDP growth jumped to 3%) corroborates that the economy has now been in a recovery phase since the third quarter of 2020 (see Chart 1).
Figure 1 Phases of GDP and the economic cycle for France
To note: The shaded areas correspond to periods of recession estimated by the French Business Cycle Dating Committee. GDP is expressed in billions of chained euros (quarterly GDP in volume.
Source: Insee (data available on October 29, 2021).
Thus, even if the confinements imposed in November 2020 and April 2021 weighed on economic activity, the methodology carried out by the committee confirms that the bottom of the French economy is in Q2 2020. Indeed, among the different macroeconomic variables that we have taken into account, business investment, employment and the industrial capacity utilization rate have remained on a continuous growth since 2020Q2, while industrial production and hours worked were more volatile over this period.
If we look at the sectoral diffusion of the recovery phase, it turns out that only five of the top 15 business sectors saw a decline between 2020Q3 and 2021Q1. These sectors were the most affected by the closures of November 2020 and April 2021 (i.e. trade, transport, catering and hospitality services, household services and the food industry. transport equipment), but they represent only less than 20% of total GDP. The vast majority of commercial sectors, representing around 60% of GDP, saw their activity increase over this period.
An atypical recession: Large amplitude but short duration
The shock of the Covid-19 which hit the French economy in 2020 was totally out of the ordinary. The period of recession from peak to par lasted two quarters – the shortest since 1970 – while the average duration of a recession is four quarters for the four previous episodes identified by the committee (oil shocks in 1974-75 and 1980 , investment cycle in 1992 -93, and the Great Recession of 2008-09). However, this recession is by far the most important in terms of amplitude since the drop in GDP is equal to 18.4% between the peak and the trough, compared to an average drop of 1.6% (see Table 1). ).
Table 1 Chronology of the economic cycle in France by the dating committee
To note: The duration is expressed in quarters, the depth in percentage and the severity is defined by: | 0.5 × Duration × Depth |. The date t of the peak corresponds to the end of the expansion period (i.e. the recession begins in t + 1). The date t of the trough corresponds to the end of the recession period (i.e. the expansion begins in t + 1). * By convention, the dates of the last two turns are supposed to be provisional.
Now that the bottom of the economic cycle linked to the Covid-19 pandemic is behind us, can we say that the effects of the crisis have been fully absorbed? GDP growth forecasts for 2021 are rather good (6.75% according to the IMF; IMF 2021), but we must not forget that this rebound comes after a historic plunge of around 8% in 2020. In addition, the Empirical studies often highlight the hysteresis effects of recessions on long-term growth (eg Blanchard and Summers 1986). It is now well established that business cycles are not independent of long-term trends and that potential growth drivers can be negatively affected (see Cerra et al. 2020). France does not seem to escape this empirical evidence: GDP growth went from an average value of around 1.3% per quarter over the 1970-1974 expansion period to an average value of around 0.3 % over the 2009-2019 expansion period, even in the event of secular stagnation, factors are obviously also at play. Thus, even if the Covid-19 recession is over, the French economy is still recovering and the experiences past history prompts us to remain vigilant with regard to future growth, in particular with regard to the support of economic policies to activity.
Aviat, A, F Bec, C Diebolt, C Doz, D Ferrand, L Ferrara, E Heyer, V Mignon et PA Pionnier (2021), « Dating business cycles in France : A reference chronology », Working Paper, French Economic Association.
Blanchard, O et L Summers (1986), « Hysteresis and the European Unemployment Problem », chapitres NBER, NBER Macroeconomics Annual 1986, Tome 1, pages 15-90.
CEPR (2021), “The latest findings of the CEPR-EABCN Euro Area Business Cycle Dating Committee (EABCDC)”, Euro Area Business Cycle Dating Committee, November 10.
Cerra, V, A Fatás and SC Saxena (2020), “The Persistence of a COVID-Induced Global Recession,” VoxEU.org, May 14.
Ferrara, L (2020), « A Severe US Recession », Econbrowser, 9 juin.
Ferrara, L and V Mignon (2021a), “The dating of economic cycles in France: a reference chronology”, VoxEU.org, July 17.
Ferrara, L and V Mignon (2021b), “French economic recession: the trough has passed, but the effects persist”, The Conversation, 21 November.
FMI (2021), « France : Staff Conncing Statement of the 2021 Article IV Mission », FMI, 9 novembre.
Insee (2021), “GDP accelerated in Q3 2021 (+ 3.0%) and returned to its pre-crisis level (-0.1% compared to Q4 2019),” Insee, October 29.
NBER (2021), “Determination of the April 2020 low in economic activity in the United States”, NBER BCDC, July 2021.