France’s economy contracted by 13.8 percent in the second quarter (Q2) after household consumption and investment, the country’s main growth engines, tumbled under severe economic fallout from anti-coronavirus lockdown, national statistics institute (INSEE) said on Friday.
The contraction was less than the initially estimated 17 percent, but it means that France entered a deep recession after two consecutive quarters of contraction.
The eurozone’s second-biggest economy was down by 5.9 percent in Q1, said INSEE, revising its initial forecast of a 5.3 percent fall. The gross domestic product (GDP) has already contracted by 0.2 percent in the last quarter of 2019 due to unrelenting strikes against pension reform.
“GDP’s negative developments in the first half of 2020 is linked to the shutdown of non-essential activities in the context of the implementation of the lockdown between mid-March and the beginning of May,” INSEE said.
“The gradual ending of restrictions led to a gradual recovery of economic activity in May and June, after the low point reached in April,” it added.
Restrictive rules aimed to contain the coronavirus pandemic depressed household consumption, which dropped by 11 percent in Q2 after a 5.8 percent decline in Q1.
Investment tumbled by 17.8 percent and exports fell by 25.5 percent in Q2, compared with a decline of 10.3 percent and 6.1 percent respectively in Q1.
“This is a severe number, but it is a less severe than expected,” Economic and Finance Minister Bruno Le Maire said. “It proves that we are not powerless in the face of the crisis. Yes, the crisis has an unprecedented severity, but we can improve things.”
“We must continue to have radical, strong responses to recover as quickly as possible,” he told CNews television.
For the whole year of 2020, the institute expected a contraction of 9 percent.