Current economic developments

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
Post n°236

Lessons from the Marshall Plan for the European Recovery Plan

Published on 10/29/2021

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By Jean-Baptiste Gossé, Aymeric Schneider and Roger Vicquéry

The EU post-Covid recovery plan is the largest European-wide fiscal stimulus in 70 years. This post revisits the experience of the Marshall Plan by highlighting the role of structural effects, conditionality design, the need to prepare the plan exit, the influence of fundamentals and the importance of the plan’s success as a vector of European integration.

Chart 1: Marshall Plan and European plan by type of aid and size of investments financed (% of GDP of recipient countries)
Chart 1: Marshall Plan and European plan by type of aid and size of investments financed (% of GDP of recipient countries)
Updated on 10/29/2021 21:20
Post n°234

Out-of-court proceedings to help companies exit the crisis

Published on 10/21/2021

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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
Updated on 10/21/2021 18:57
Post n°229

Covid-19 and divergence in GDP declines between Europe and the United States

Published on 09/28/2021

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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
Updated on 09/28/2021 09:04
Post n°222

The 2009 and 2020 crises: diverging external balance trajectories

Published on 07/02/2021

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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.
Updated on 07/02/2021 16:30

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