ECBs Villeroy Says French Recovery May Be Better Than Expected

Bank of France Governor Francois Villeroy de Galhau said the countrys economy is picking up faster than expected and that forecasts
from the International Monetary Fund may be too gloomy.To get more news
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“Things are going at least as well as we forecast at the start of
June, and even a bit better,” Villeroy said on French television channel
LCI, citing the central banks monthly indicator of business activity.
Villeroy has compared the economic recovery to the shape of a bird
wing, with a sharp upturn as confinement measures ended, followed by a
steady return to the pre crisis level of output.

The contraction in 2020 may not be as sharp as the 10% decline the Bank
of France forecast last month, Villeroy said, noting that the government
forecasts -11% and the IMF -12.5%.
How quickly French households spend savings built up during the crisis
will be key to further accelerating the recovery in 2021, Villeroy
said. To foster confidence, he said the government should avoid changes
in tax and aim to keep public debt below 120% of annual economic output.
“If households have more confidence and dip into savings to feed their
consumption, the recovery could be quicker and we could get to
pre-covid levels of activity at the end of 2021,” Villeroy said.