The health crisis resulted in a collapse in activity followed by a rapid rebound. Once the French economy had reopened, it seemed to quickly run into supply constraints, which were exacerbated during the energy crisis. The dissipation of these shocks raises the question of the economy’s position in the economic cycle and its rebound potential. To assess this, it is necessary to estimate a potential GDP that is not directly observable (i.e. the output that would be obtained if the economy operated by mobilising all available factors without generating tensions), and an output gap, which is equal to the difference between real GDP and potential GDP. Two approaches are traditionally used): a direct method based on company responses to the business tendency surveys and a structural model based on national accounting data.

While the two methods show a good level of agreement for the period 1995-2019, updating the output gap estimates revealed some significant divergences over the period 2020-2024. The method based on the business tendency surveys suggests that the decline in GDP during these crises was accompanied by a fall in potential GDP, whereas the structural approach considers that the economy evolved below its potential during these years. This divergence stems from the fact that the business tendency surveys capture a deviation from a “short-term” potential, while the structural method seeks to identify the “long-term” potential. When shocks are essentially demand shocks or lasting changes in supply, the two notions can be conflated, but this is not the case in periods of temporary supply shocks, such as the health crisis or supply chain disruptions. In these cases, inflation-free potential output is temporarily lowered without lowering the long term potential as much, if at all. For the direct method, the resulting decline in GDP corresponds to a decline in potential GDP and not to a widening of the output gap, whereas the structural approach treats it as a one-off event with no impact on potential GDP. However, both methods seem to indicate that by the end of 2024, the economy was relatively close to its potential...