French Economic Growth Seen Slowing as Third Lockdown Hits

French Economic Growth Seen Slowing as Third Lockdown Hits

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French economic growth will slow in the second quarter as renewed curbs to contain the resurgent pandemic delay the more robust recovery that is expected in other countries, forecasts from the national statistics bureau Insee show.

The French economy had proved resilient at the start of the year, growing 0.4% in the first quarter while the euro area as a whole slid into recession. Yet for the current quarter, Insee forecasts the growth rate will decelerate to around 0.25% after the government implemented a strict lockdown in April that will lift only gradually in May and June.

Living With Lockdowns

French activity declined less in last month’s lockdown than November’s

Source: Insee

At around 4% below pre-crisis levels, the loss of activity is as much as it was during the worst moment of the global financial crisis, Insee’s chief economist Julien Pouget said.

Still, the economy is holding up better than during the first two nationwide lockdowns in April and October of last year, and vast government support for workers and households has preserved productive capacity, Insee said.

“The economy can rebound quickly, if and only if the pandemic is kept in check,” Pouget said. “We are both so far and so near to recovery,”

Bloomberg Economics predicts the currency bloc as a whole will see output grow around 1.6% this quarter, with Germany expanding 2.7% and Italy 1%.

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