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French economy falls 17 pct in Q2 but situation is better than expected

Christian Fernsby ▼ | June 18, 2020
France's national statistic bureau INSEE said the country's gross domestic product (GDP) fell by 17 percent in the second quarter (Q2) this year, better than its previous estimation of a fall of 20 percent in late May.
French activity
Fall   French activity
It also revised the extent of the decline in GDP in the first quarter to 5.3 percent, against a decrease of 5.8 percent previously announced.

Topics: French

Three months ago, on March 17, a large part of the French economy was shut down to curb the spread of the coronavirus. Since May 11, the confinement started to ease.

According to the latest available indicators, the loss of economic activity compared to a normal situation would have been 29 percent in April, 22 percent in May and would be limited to 12 percent in June, said INSEE.

"The economic recovery has therefore been very clear since mid-May, after a month of April which will no doubt be remembered as one of the worst months the French economy has experienced in peacetime," noted INSEE.

It added that the risks were rather on the rise in the very short term and it is impossible to predict when the economy will return to its pre-crisis level.

"In general, the impact of health security protocols on labor productivity remains to be assessed. And questions remain about the future behavior of companies in terms of investment, just as with that of households in terms of consumption," said INSEE.

Other factors that make prediction difficult include the international environment which "will undoubtedly remain uncertain for a long time" and the threat of a second epidemic wave, it added.