France’s economy declined in the second quarter at a record rate of 13.8% compared to the previous period due to the coronacrisis and lockdown measures to combat virus outbreaks. This was reported by the French National Statistical Office in a preliminary estimate.
It is the strongest contraction since the beginning of measurements more than 70 years ago. However, the decline was somewhat less pronounced than expected, as economists had estimated a quarter-on-quarter min of 15.2 percent. In the first quarter of this year, the French economy had already recorded an adjusted minus of 5.9%. At that time, France was already suffering from the crisis.
Compared to a year ago, France’s economy shrank by 19%. The virus outbreak hit French industry, construction and tourism hard, as did Investment, Trade and consumer spending. The French economy is expected to show a strong recovery from the crisis in the third quarter, thanks to the relaxation of the lockdown measures. In addition, the French government has come up with huge support packages to counter the impact of the pandemic.
The French Finance minister Bruno Le Maire said that the figures were not as bad as they were feared and that measures to support the economy should continue. The French government is taking account of an economic downturn of 11% for the whole of 2020.
Later in the day, figures on the economies of Spain, Italy and the euro area will also be published in the second quarter. Here, too, sharp declines are predicted as a result of the coronacrisis. On Thursday it was already known that Germany’s economy has shrunk by more than 10% in the last period, which is the strongest downturn since the measurements began.