France’s economic slump may not be quite as bad as forecast and activity in the euro zone’s second biggest economy could return to pre-crisis levels in early 2022, the central bank governor has said.

Francois Villeroy de Galhau told Paris Match magazine that President Emmanuel Macron’s government must spend wisely to rebuild trust in the economy. Household and private sector confidence were the key to a relatively swift recovery, he said.

“Our forecasts predict a 10% fall in GDP this year: it may be a little better, with a strong rebound afterwards to hopefully regain a pre-COVID level of activity at the start of 2022,” Villeroy said in the interview published on Thursday.

The government availed a crisis package worth 137 billion euros, or more than 6% of gross domestic product, to cushion the immediate impact of the epidemic and also committed to guarantee 300 billion euros in bank loans to help keep firms afloat.

After the summer break, it will present a 100 billion euro stimulus package to propel the recovery. Spending decisions would need to be intelligent, Villeroy said.

“Public money is not unlimited,” he said. The ‘whatever it takes’ must progressively give way to the ‘when it is needed’.”

French households would be sitting on a 100 billion-euro pool of savings by the end of the year. But for that money to filter into the economy, it was essential for the government to guarantee taxes would not be raised, or indeed cut as it could not afford to do so.

Underscoring the difficulties ahead, consumer confidence unexpectedly dropped in July, as the number of people who considered now a good time to save increased amid a flare up in COVID-19 infections.