The French economy is officially in recession as it shrank by 5.8% in the first quarter due to the country’s strict lockdown measures in place since mid-March, according to an initial estimate unveiled on Thursday (30 April) by France’s National Institute for Statistics and Economic Studies (INSEE), reports EURACTIV France.
After France’s gross domestic product (GDP) saw a mild 0.1% drop in the last quarter of last year, the results for the first quarter of 2020 confirm that France has indeed entered a recession.
This is the largest drop recorded since quarterly GDP estimates were first introduced in 1949, and is well above the declines in the first quarter of 2009 (-1.6%) or the second quarter of 1968 (-5.3%), the INSEE said.
This reduced activity “is mainly linked to the cessation of ‘non-essential’ activities since the country adopted a strict lockdown in mid-March,” explained INSEE, whose assessments are similar to the Banque of France’s predictions published at the start of April, estimating up to a 6% GDP drop in the first quarter.
While household spending experienced an “unprecedented” 6.1% drop, business investment fell even more sharply, by 11.8%, after the government decided to close many shops, restaurants and cafés, according to INSEE.