The French economy is officially in recession and contracted by 5.8% in the first quarter, mainly due to the lockdown in place since mid-March to curb the Covid-19 pandemic, according to a first estimate revealed by Insee.
This is the steepest decline in the history of quarterly GDP assessments, which began in 1949, and it far surpasses the declines of the first quarter of 2009 (-1.6%) or the second quarter of 1968 (-5.3%), Insee specifies.
Following the 0.1% decline in France’s gross domestic product (GDP) recorded in the last quarter of 2019, this performance confirms that France has indeed entered a recession.
This drop in activity “is mainly due to the halt of ‘non-essential’ activities in the context of the implementation of the lockdown starting from mid-March,” explains the National Institute of Statistics in its publication.
This assessment is in line with that of the Bank of France, published in early April, which estimated a contraction of GDP by about 6% in the first quarter.
Insee does not publish a forecast for the entire year 2020, but it estimated that each month of lockdown would reduce French growth by 3 points over a year and that the recovery “will take time” after the lockdown, which is expected to be gradually lifted from May 11.
The government, at this stage, expects a GDP drop of -8% this year.
