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The Foreign Trade The Great Unknown of 2021 - PDF

Added on - 14 Jun 2021

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Macroeconomics IITHE THREE MOST IMPORTANTISSUES FACING FRANCE’SECONOMY IN 2021Jeanne BALBOTSt Kliment University
CONTEXT.................................................................................................................................................... 2THE FOREING TRADE: THE GREAT UNKNOWN OF 2021.................................................................. 3A)FACT AND IMPORTANCE OF THIS PARAMETER............................................................................................ 3B)FIGURES.................................................................................................................................................... 3C)POTENTIALS SOLUTIONS.......................................................................................................................... 4UNEMPLOYMENT: 2021, A BLACK YEAR?........................................................................................... 4A)THE CONSEQUENCES OF POST-CRISIS UNEMPLOYMENT............................................................................. 4B)FIGURES.................................................................................................................................................... 5C)SOLUTIONS IMPLEMENTED........................................................................................................................ 6INEQUALITIES: INEQUALITY AND POVERTY, THE LIGHTS TURN RED....................................... 6A)THE RICHEST SPARED BY THE COVID CRISIS............................................................................................... 6B)FIGURES:PERCENTAGE OF RESPONDENTS WHO CONSIDER THEIR FINANCIAL SITUATION TO HAVEWORSENED DURING CONFINEMENT,BY STANDARD OF LIVING............................................................................ 7C)EMERGENCY MEASURES TO LEAVE NO ONE BEHIND.................................................................................. 8CONCLUSION: A RECOVERY TO BE PLANNED.................................................................................. 9REFERENCES........................................................................................................................................... 10
CONTEXTFor more than a year, the waves of the pandemic have followed one another.Although no country has been spared, not all have suffered the same health, economicand social damage. Some countries are seeing the end of the tunnel, the least affected,such as many Asian countries, or those that have been able to vaccinate theirpopulation quickly. France is still confronted with a strong circulation of the virus butis not doing any better or worse than its neighbors. One year ago, France's firstlockdown disrupted our lives and sent the economy into a free fall. A record drop inGDP (-19%) in the second quarter of 2020. Over the whole of 2020, production down-8.2%, hundreds of thousands of jobs lost, an explosion of debt, etc. As the viruscontinues to spread and all its inherent risks, the fate of growth depends on the successof the vaccination campaigns.As the experts at INSEE state in their forecast for 2021, next year's economicrecovery will face several major unknowns. Among them, three are particularlyclosely watched by economic forecasters: The foreign trade, unemployment (businessfailures), and the evolution of inequality. After having triggered their stimulus plans tolimit the losses of companies linked to the confinements, will the States be able to facetheir new responsibilities? Can France recover its pre-crisis economic level? Andabove all, is this desirable?
THE FOREING TRADE: The great unknown of 2021a)Fact and importance of this parameterFrance is a major player in global trade. It is the world's sixth largest exporterand importer of goods and has no fewer than 128,323 French exporting companies. Itsmain customers are Germany, Italy, the United States and Spain and its main suppliersare Germany: 71.7 billion, China: 56.6 billion, Italy: 39.2 billion and Spain: 35.4billion. Trade represents more than 65% of the country's GDP. France exports mainlyaircraft, vehicles, pharmaceuticals, food products (wine), hydrocarbons and electroniccomponents. The country imports many consumer goods, vehicles, hydrocarbons andpharmaceutical products. In 2020, due to the COVID-19 pandemic, trade volumecollapsed. According to IMF data, the volume of exports of goods and servicesdecreased by -16.8% compared to 2019, and the volume of imports decreased by -11.4%. Although trade has recovered, the path to this new economic normal is stilldifficult. The IMF forecasts a rebound in export volumes in 2021 (+9%) and 2022(+5.4%), at a slightly faster pace than imports, which are expected to rise by 8.5% in2021 and 4.7% in 2022.I think it is very important to talk about this parameter because the fluidity oftrade has been considerably hampered, as has the strength of supply chains, and supplydifficulties are multiplying. This is a parameter that should not be overlooked, as weare seeing a sharpslowdown in French production of export goods (containmentmeasures, shortages of industrial inputs). French demand for foreign goods (energy,consumer goods, industrial goods) is declining, as is foreign supply (closure offactories abroad, disruption of value chains).b)Figures
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