France’s Le Maire Calls His 2021 Growth Forecast a ‘Challenge’

(Bloomberg) -- French Finance Minister Bruno Le Maire said the government’s economic forecast of 6% growth in 2021 will be tough to achieve, depending on the speed of coronavirus vaccinations and the impact of lockdowns in neighboring countries.

“The next weeks will be difficult and we need to face up to it,” Le Maire said in an online press conference. “We have forecast growth of 6% in 2021, which would be the highest in the last 50 years. But this figure is a challenge and I want us to be clear about that and the economic uncertainties that surround us.”

High-frequency indicators tracked by Bloomberg Economics show a bounce in economic activity in most countries, including France, in the first week of the year. But mounting concerns over the spread of the virus and the slow pace of vaccinations in the nation suggest that gain won’t be sustained.

Le Maire said the French government will continue providing emergency aid as long as the crisis continues. The finance ministry is currently working on expanding the solidarity fund to help bigger companies with fixed costs, notably in the hotel and restaurant sector.

The ceiling of 200,000 euros ($243,000) of aid is insufficient, and the government is considering raising it to 3 million euros for some firms, he said.

He also said he is also in talks with banks to make delaying repayments of state-guaranteed loans to March 2022 a right rather than a possibility.

“Everyone must know we will stand by them in the coming weeks and months, and that we will maintain support measures as long as necessary,” Le Maire said. “If we have to continue beyond the end of the health crisis, I would have no hesitation to help sectors recover.”

Air France, the embattled carrier which has already received 7 billion euros of state support from the French government, could also receive more aid.

“Air France knows that whatever the circumstances, it can count on the constant support of the French state,” Le Maire said.