From Pandemic to Energy Crisis: France and the European Economy

Abstract

The European economy has been hit by twin shocks, with the Covid pandemic followed by a severe energy shock driven by Russia’s invasion of Ukraine. Growth is slipping, inflation is at 40 year highs, and recent financial turbulence in the UK suggests that risk are rising concerning fiscal sustainability and financial stability in some countries. France has weathered these crises relatively well—its recovery from the economic effects of Covid was strong, and the initial effects of challenges, particularly high and rising public debt and weakening growth prospects. The presentation will explore these issues, drawing from the just-concluded annual economic review of France by IMF staff and the recently published Regional Economic Outlook for Europe.