Current economic developments

Post n°234
Published on 10/21/2021

By Chloé Zapha and David Fouet

Using out-of-court proceedings to resolve companies’ financial difficulties can help them to recover by preserving their reputation. However, directors seldom use them, partly because of a lack of information available about these facilities. It would be beneficial for small companies to make use of these "crisis exit" restructuring mechanisms, which are designed for them.

Chart 1: Out-of-court proceedings, which are more effective in helping businesses to recover, account for only 5% of proceedings initiated in 2019
Chart 1: Out-of-court proceedings, which are more effective in helping businesses to recover, account for only 5% of proceedings initiated in 2019 Note: judicial liquidation is “direct” when the company has not made use of other proceedings beforehand. Source: Ministry of Justice - Statistical analysis of the general civil register, 2019
Post n°229
Published on 09/28/2021

By Nicolas Chatelais

In 2020, the fall in GDP was less pronounced in the United States than in Europe. The restrictions on activity and travel – both imposed and voluntary - linked to the fight against the pandemic, which were greater in France/Italy/Spain, account for more than 40% of the gap with the United States. This factor was amplified by the difference in sectoral specialization (US digital advantage, weight of tourism in Europe). The difference in the level of fiscal support explains less than 20% of the gap.

Chart 1: Factors explaining the gap in GDP variation between the United States and Europe in 2020
Chart 1: Factors explaining the gap in GDP variation between the United States and Europe in 2020 Sources: IMF, national, author’s calculations
Post n°222
Published on 07/02/2021

By Pierre Sicsic

The increase in the French fiscal deficit in 2020 was greater than in 2009 and accompanied by a deterioration in the external deficit. Accordingly, the nation's financing requirements (for households, companies and government) increased in 2020, unlike in 2009, with the financing requirements of financial and non-financial corporations increasing.

Chart 1: Net lending by sector (in percentage points of GDP)
Chart 1: Net lending by sector (in percentage points of GDP) Note: “Companies” refers to financial and non-financial corporations.
Post n°219
Published on 06/15/2021

By Vanessa Doucinet, David Ly and Ghjuvanni Torre

Between the end of December 2019 and the end of March 2021, companies' gross debt increased by EUR 224 billion, while their cash position rose by EUR 215 billion. Based on a first analysis of the 205,392 balance sheets received by the Banque de France, it is possible to break down these overall reassuring figures in more detail: 6 to 7% of the total number of rated companies could face difficulties when the support measures are lifted.

Chart 1: Changes in companies’ gross financial debt and cash position Source: Banque de France - Companies Directorate. Key: “sensitive” quadrant, red disk: 11.4% of companies that have not taken out a State-guaranteed loan (SGL) whose gross debt has increased by 22% and cash position has decreased by 33%.
Post n°214
Published on 05/05/2021

By Mathilde Gerardin and Jean-François Ouvrard

In the Monthly Business Survey (MBS) carried out at the end of February/beginning of March 2021, business leaders were asked about the organisational costs associated with COVID and their ability to pass them on to their selling prices. These costs may be high for some sectors but their ability to pass them on to prices appears to be generally limited. Ultimately, the direct and indirect impact on the general level of consumer prices should therefore be small, between 0.1 and 0.3 percentage point, but these costs could affect the margins of some companies.

Chart 1: Direct impact on selling prices of the additional costs generated by the health measures
Chart 1: Direct impact on selling prices of the additional costs generated by the health measures Source: The Banque de France's monthly business survey
Post n°211
Published on 04/22/2021

By Benjamin Bureau, Anne Duquerroy, Mathias Lé and Frédéric Vinas (Banque de France), Julien Giorgi and Suzanne Scott (INSEE)

Since the start of the public health crisis, the Banque de France and INSEE have compiled a monthly estimate of the loss of activity in each sector, notably via their monthly economic surveys and their monitoring of high-frequency data. The monthly surveys have proved to be a reliable and almost real-time indicator of the impact of the restrictions, and have on the whole been confirmed by the national quarterly accounts. In parallel, the Banque de France and INSEE have launched a joint project which differs from these surveys but complements them in terms of methodology: using real turnover data for individual firms (measured using VAT returns), they compare ex-post the “activity shock” with a counterfactual of what turnover would have been without the. This makes it possible to carry out an analysis at a more granular level, within individual sectors. This blog post presents the first results of this project, which are consistent with our monthly surveys. They will be supplemented with an ex-post analysis of firms’ cash and financial positions.

Chart 1 – Evolution of the aggregate shock to activity over 2020
Chart 1 – Evolution of the aggregate shock to activity over 2020 Source: VAT data (DGFiP) and authors’ calculations.
Post n°206
Published on 03/03/2021

By Stefan Gebauer, Jean-François Ouvrard and Camille Thubin

We study the role of precautionary savings in the recent rise in French household savings. Using different approaches, we show that elevated uncertainty contributed to the surge in savings in 2020, notably in the first lockdown. For the whole year, however, uncertainty effects were small compared to the contribution of administrative spending constraints.

Figure 1: Household savings ratio in France (in % of disposable income)
Figure 1: Household savings ratio in France (in % of disposable income) Source: INSEE (most recent observation: 2020Q4). Note: Household savings in per cent of gross disposable income. Most recent observation: 2020Q4.
Post n°205
Published on 02/23/2021

By Olivier de Bandt, Jean-Charles Bricongne and Lionel Fontagné

The environment that economic policy makers face today is characterised by both a large amount of uncertainty and a high level of globalisation. This blog post highlights a perception of increasing uncertainty by economic agents when external shocks become more frequent, and a faster transmission of these shocks when the economy is more open, or when traded goods are produced within more sophisticated "value chains". Globalisation has thus heightened the macroeconomic impact of uncertainty on the real economy, amplifying the consequences of international uncertainty shocks.

Chart 1: Uncertainty and openness of the euro area current account (1999-2019)
Chart 1: Uncertainty and openness of the euro area current account (1999-2019)
Post n°204
Published on 02/17/2021

By Raphaël Cancé, Jean-François Ouvrard and Camille Thubin

The health crisis has caused an unprecedented economic shock. In this post, we describe its different channels using the FR-BDF forecasting model. In 2020, shocks to private domestic demand and to trade performance dominate. In 2021 and 2022, public support is expected to speed up economic recovery, but supply shocks should slow down the rebound.

Chart 1: Deviation of projected activity in December 2020 from the pre-crisis path
Chart 1: Deviation of projected activity in December 2020 from the pre-crisis path Source: Banque de France (FR-BDF model, December 2020 macroeconomic projections)
Post n°192
Published on 12/10/2020

By Chloé Zapha

Collective restructuring proceedings could be improved in order to deal effectively with ailing firms. Speeding up the process of corporate debt restructuring - starting with the safeguard procedure - could help as many firms as possible to recover.

Chart 1: fewer receivership proceedings have been initiated than in previous years since the beginning of lockdown
Chart 1: fewer receivership proceedings have been initiated than in previous years since the beginning of lockdown Source: France Stratégie (data from the BODACC, calculations by Cros, Epaulard and Zapha)

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