The situation is not reassuring. For months now, France has been facing a sharp rise in consumer prices. The pocketbooks of workers seem to be shrinking, as gas costs more and the “errands” budget grows heavier. Inflation, a phenomenon facing all of Europe, results partly from the health crisis (and the economic policy choices made at the time) but also from the war in Ukraine, which mechanically leads to difficulties in transporting and production of certain products. Planet has already warned of the risk of shortages that may result.
This postulate posed, it is also important to remember that the phenomenon could worsen. As Le Journal du Net explains on its website, inflation is on the rise. Some bosses of large retailers, as may be the case of Dominique Schelcher, fear today “an inflation of 7% or even a little more”, notes Le Figaro. “We’re only halfway there,” he said. And the manufacturers to plan a series of measures supposed to preserve the purchasing power of the French and the French…
In fact, the consequences of inflation become difficult to ignore. The liter of fuel, which is one of the goods whose prices have increased the most, could be charged 3 euros in the coming months, informs the specialized site AutoPlus. That being said, such an increase seems relatively unlikely, according to some experts.
“3 € per liter is a lot but that we have an oil price that continues to increase, that seems to me to be quite certain. €2.50, it’s possible, yes”, indeed tempers Thierry Bros, energy and climate specialist, who teaches at Sciences-Po. His words are echoed by our colleagues.
The shock, estimates the Banque de France, will be stronger than initially expected. The organization, informs the specialized daily Les Echos, presented several scenarios relating to the evolution of the situation this Tuesday, June 21, 2022. The central track expects growth of the French economy by 2.3% and an increase in GDP limited to 1.5% in 2021. A recession should soon follow.
Any “soft landing” appears “more and more improbable” believes for her part Christine Lagarde, President of the ECB. However, it rules out any risk of “stagflation”.
In the current state of things, La Tribune points out on its site, it is indeed the risk of recession that seems to worry analysis organizations and experts. Some also fear deflation. “I would add a deflation scenario that would go with a recession scenario, we haven’t talked about it for ten years but it could come with it, especially if things turned sour in Europe,” said Christophe Caffet, chief economist at Coface.
The recession, recalls the Fortuneo bank on its site, is an economic phenomenon generally quite short. However, the effects produced are felt over several years. They tend to push companies into bankruptcy and therefore lead to a sharp increase in unemployment. For households, this generally translates into a loss of purchasing power and rising inequality. The value of savings products also falls.