What growth forecasts for 2021-2022 must consider

It is not very hard to calculate the loss of activity during a lockdown: the GDP share of the sectors hit by the lockdown can be measured and new high-frequency indicators are available. But it is much harder to draw up growth forecasts for the period following the return to a normal public health situation (second quarter of 2021, 2022). Forecasters must consider the behaviours that may have been altered by a crisis without historical precedents. In particular, this concerns: Households’ saving behaviour: are there still precautionary savings ? How will the forced savings accumulated during the crisis be used? How will companies respond to the deterioration in their balance sheets and the increase in their debt? How much investment and employment can be transferred from permanently weakened sectors to growing sectors? It is difficult to forecast these behaviours and mechanisms, leading to major uncertainty over growth forecasts for the “post-COVID” period. We illustrate these general points with the case of France.