Current economic developments

Post n°303

How do firms finance their investment?

Published on 02/06/2023

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By Mathias Lé and Frédéric Vinas

We analyse how French firms financed their investment over the 1992-2016 period. We show that the funding mix varied significantly according to the size of the firms, whether or not they were listed on the stock exchange and the nature of the investments undertaken. These results suggest that the Capital Market Union could foster business investment by developing equity financing.

Chart 1: Breakdown of investment financing by listed and unlisted companies (% of total financing)
Chart 1: Breakdown of investment financing by listed and unlisted companies (% of total financing)
Updated on 02/06/2023 11:16
Post n°301

Negotiated wage increases: what is the picture for 2022?

Published on 01/20/2023

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By Erwan Gautier

Industry-level wage bargaining for 2022 was impacted by the high inflation context. Over the year, close to 150 industries revised the agreements signed at the end of 2021 or beginning of 2022. Overall, at the end of the year, negotiated wage increases amounted to an average of 5% year-on-year (compared with 3% at the beginning of the year). However, this higher increase in negotiated wages does not, at this stage, point to the start of a wage-price spiral.

Chart 1: Changes in negotiated wages, the national minimum wage, the average wage per capita (adjusted for the effects of the job retention scheme) and inflation (year-on-year, %)
Chart 1: Changes in negotiated wages, the national minimum wage, the average wage per capita (adjusted for the effects of the job retention scheme) and inflation (year-on-year, %)
Updated on 02/03/2023 13:17
Post n°298

Dynamics and Implications of the Recent Rise in Wheat Prices

Published on 12/23/2022

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By Raj Rajesh, Paul Vertier, Thibault Lemaire, Arthur Stalla-Bourdillon, and Aude Le Metayer

The increase in global wheat prices in the last two years, especially after the start of the Ukraine war, reflects a strong market integration and a high dependence on energy and fertiliser prices. As several developing countries depend on a small number of wheat exporters, curbing food insecurity will require coordinated action and crop diversification.

Chart 1: International export prices (free on board) of wheat in different markets
Chart 1: International export prices (free on board) of wheat in different markets Source: FAO
Updated on 12/23/2022 14:00
Post n°293

How much do China’s regional lockdowns affect international trade?

Published on 12/02/2022

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By Sebastian Stumpner

As part of its zero-Covid policy, China uses regional lockdowns to limit the spread of the virus. This blog estimates the effect of these regional lockdowns on Chinese trade. While most lockdowns have no noticeable effect, lockdowns of very high stringency are continuing to depress trade. The particularly stringent Shanghai lockdown in April 2022 reduced aggregate Chinese trade by 3-4%.

Chart 1: Exports of Shanghai Province collapsed during the Shanghai Lockdown
Chart 1: Exports of Shanghai Province collapsed during the Shanghai Lockdown
Updated on 12/02/2022 08:44
Post n°283

The resilience of French SMEs two years into the Covid crisis

Published on 09/19/2022

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By Nicoletta Berardi, Benjamin Bureau and Frédéric Delamarre

This post assesses the financial position of French SMEs at the end of March 2022, i.e. two years after the start of the Covid-19 crisis, and at the very beginning of the war in Ukraine. It finds that the vast majority of SMEs have weathered the health crisis well, particularly by keeping their net bank debt under control.

Chart 1: Distribution of SMEs according to their level of net bank debt (as % of number of companies)
Chart 1: Distribution of SMEs according to their level of net bank debt (as % of number of companies) Source: Banque de France, Anacredit and ad hoc bank deposit database
Updated on 09/19/2022 08:43
Post n°268

How much have rising transport costs affected US import prices?

Published on 05/11/2022

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By Sebastian Stumpner

This blog post examines to what extent the recent surge in international transport costs has fuelled US import price inflation. While we find a moderate effect at the aggregate level, there are significant differences across products that are largely driven by the degree of containerisation.

Chart 1: The share of transport costs has increased only for containerised goods
Chart 1: The share of transport costs has increased only for containerised goods Source: Author’s calculations based on data from TradeDataMonitor.
Updated on 05/11/2022 18:19
Post n°264

European Union debt, a new benchmark asset?

Published on 03/28/2022

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By Léa Le Quéau, Agathe Madeline and Paul Sabalot

The European Union is going to issue close to EUR 800 billion of debt to finance the NextGenerationEU recovery plan, making it one of the largest public debt issuers in the euro area. European debt has some key advantages that would make it ideal as a benchmark asset. However, it still needs to reach the critical mass required to ensure a sufficiently liquid secondary market.

Chart 1: NGEU debt yields are comparable to those of the highest rated euro area issuers Source: Authors’ calculations using Bloomberg data and median of Moody’s, S&P and Fitch ratings (data as at 18/03/2022).
Updated on 03/29/2022 10:38
Post n°260

Exchange rate flexibility and resilience to external shocks in Sub-Saharan Africa

Published on 03/11/2022

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By Bruno Cabrillac and Vincent Fleuriet

The Covid-19 crisis, combining supply and demand shocks with associated inflationary pressures, provides an opportunity to reassess the advantages of fixed exchange rate regimes over flexible or intermediate exchange rate regimes, in particular in Sub-Saharan Africa (SSA). Indeed, in this context, the anchoring of the currency via the fixed exchange rate gives more monetary policy space…

Inflation in Sub-Saharan Africa
Inflation in Sub-Saharan Africa Source: IMF (World Economic Outlook, Oct. 2021, dotted line = forecast) and Banque de France calculations.
Updated on 03/11/2022 18:35
Post n°256

Financial savings, debt and money holdings during the pandemic

Published on 02/11/2022

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By Louis Bê Duc

The increase in the money holdings by the non-financial sector in the euro area and the United States during the pandemic is explained by the strong increase in financial savings linked to public transfers and the sustained growth of loans, and in particular (in the euro area), government-guaranteed loans. Portfolio shifts strengthened the monetary dynamics in the United States, while they dampened them in the euro area.

Chart 1. Sources of change in money holdings by households in the euro area (Change in annual flows as a % of GDP)
Chart 1. Sources of change in money holdings by households in the euro area (Change in annual flows as a % of GDP) Source: Euro area sector accounts, ECB.
Updated on 02/25/2022 18:43
Post n°252

The importance of supply-side bottlenecks in France

Published on 01/21/2022

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By Stefan Gebauer

Relative to demand factors, supply-side disruptions during the Covid-19 pandemic explain about 60% of longer delivery times and significantly dampened manufacturing output since 2020 in France. According to historical regularities, bottlenecks are expected to unwind in the course of 2022, while forecasts are surrounded by a high degree of uncertainty given the unusual origins of disruptions.

Chart 1: Shock decomposition – Suppliers’ delivery time and output PMI France
Chart 1: Shock decomposition – Suppliers’ delivery time and output PMI France Source: Markit, own calculations. Note: Demeaned index value and ppt. contributions, index increase = faster deliveries. Most recent observation: 2021M12.
Updated on 01/21/2022 20:08

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