In the event of a total gas supply cut-off from Russia, French growth could lose “up to a point” in gross domestic product (GDP), Economy Minister Bruno Le Maire said in Paris on Thursday.
Russian President “Vladimir Putin may decide tomorrow to completely cut off gas to Europe, in which case we will have an impact on French growth,” warned the number 2 of the French Government during a lunch with journalists.
Regarding the magnitude of this impact, “we gave the figure of 0.5%” in recent days, he recalled.
0.5 to 1 point
But “depending on the impact” that a total stoppage of Russian gas deliveries has in Germany, “and the possibility of a recession in Germany, we can have an impact that would amount to one point of GDP,” Bruno Le Maire estimated.
Since Russia launched a military offensive in Ukraine at the end of February, the European Union has adopted several packages of economic sanctions against Moscow, to which the Kremlin has responded by gradually reducing gas shipments to the Old Continent.
These tensions over gas supply will be “a determining factor in French growth in 2023,” added Bruno Le Maire.
In his “stability program” sent to the European Commission in July, Bercy forecasts a 1.4% increase in French GDP in 2023.
Wrong economic situation
The forecast of the Ministry of Economy is identical to that of the OECD (Organization for Economic Cooperation and Development) but significantly higher than the expectations of the International Monetary Fund (1%).
“The economic situation, the geopolitics are not well oriented”, observed Bruno Le Maire.
“In the short term,” in addition to gas supply limitations, the minister cited “economic uncertainties in the United States, China and those that weigh on Germany, our main trading partner,” which is also a major consumer of Russian gas.
It reaffirmed its growth forecast for 2022, at 2.5%, the day after INSEE confirmed a half-point rebound in the French economy in spring, after a 0.2% decline in the first quarter.
Source: BFM TV
