Report
Patrick Artus

Lower potential growth after the COVID crisis: What consequences?

Potential growth should be expected to fall after the COVID crisis, due in particular to the loss of productive capital, the loss of human capital and the proliferation of zombie firms. What problems will this fall in potential growth create in the euro zone and France? Social tensions due to very slow growth in purchasing power; Difficulty increasing public spending, even though this will be necessary after the crisis, because of stagnant tax revenues; Against the backdrop of the return to regional value chains, little incentive to invest; Difficulty reducing debt ratios; Strong pressure on the ECB to keep interest rates low and to de facto move to yield curve control. This set of consequences of the fall in potential growth is very unpleasant. Moreover, the low level of potential growth will be self-sustaining.
Provider
Natixis
Natixis

Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.

 

Analysts
Patrick Artus

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