France’s economy to drop in second quarter due to worldwide coronavirus pandemic

France’s economy to drop in second quarter due to worldwide coronavirus pandemic

THE INSEE official statistics agency estimated on Wednesday that the French economy is heading in the right direction to contract 20 per cent in the second quarter from the last three months as the nation emerges from coronavirus lockdown.

That would show a swift break down in France’s recession after the euro zone’s second-biggest economy contracted 5.8 per cent in the first quarter.

The statistics agency estimated that France’s economic activity was running at 21 per cent below normal levels after the lockdown was lifted. Whereas, activity was down 33 per cent in early May.

Consumer spending was only 6 per cent below normal levels since most stores were recently allowed to re-open. This is a stark improvement from the 33 per cent seen in May.

A monthly survey showed consumer confidence continued to weaken in May, falling to its lowest level since last January when the country was dealing with anti-government protests.

Concerns about the general economy in May remained at levels which had not been seen since the survey began in 1972, while unemployment fears were the highest since the financial crisis in 2009.