The coronavirus crisis has indeed derailed the French economy. In the second quarter of 2020, the gross domestic product (GDP) plummeted (-13.8%), after a -5.9% drop in the first quarter of 2020, according to Insee.
Insee recently confirmed its forecast of -9% GDP for the year 2020.
The reason for this decline? The shutdown of “non-essential” activities during the lockdown implemented from mid-March to early May. The gradual lifting of restrictions is leading to a slow economic recovery in May and then June, after reaching its lowest point in April.
In detail, household consumption expenditures have fallen (-11% after -5.8%) as well as gross fixed capital formation (GFCF) in an even more pronounced manner (-17.8% after -10.3%). Public administration consumption expenditures are also down. Exports have decreased more significantly this quarter (-25.5% after -6.1%) than imports (-17.3% after -5.5%). Overall, foreign trade thus contributes negatively to GDP growth.
