France GDP Logs Double-Digit Contraction In Q2
July 30 2020 - 10:02PM
RTTF2
The French economy logged a double-digit contraction in the
second quarter due to the shut-down of "non-essential" activities
as part of the lockdown implemented to battle the coronavirus
pandemic until the start of May, first estimate from the
statistical office Insee showed Friday.
Gross domestic product fell by a record 13.8 percent
sequentially, following the first quarter's 5.9 percent decrease.
Economic output was 19 percent lower than in the second quarter of
2019.
This was also bigger than Germany's 10.1 percent fall.
Economists had forecast France GDP to decline 15.3 percent
sequentially in the second quarter.
The statistical office said the gradual ending of restrictions
to curb the spread of Covid-19 led to a gradual recovery of
economic activity in May and June, after the low point reached in
April.
The expenditure-side breakdown of GDP showed that household
spending plunged 11 percent after a 5.8 percent drop in the first
quarter.
The decline in total gross fixed capital formation was more
pronounced, which fell 17.8 percent, following a 10.3 percent
decline in the preceding period.
General government expenditure slid 8.0 percent versus a 3.5
percent drop a quarter ago. Overall, final domestic demand
excluding inventory changes contributed to -12.0 points to GDP
growth.
At the same time, exports fell 25.5 percent, bigger than the 6.1
percent decrease a quarter ago. Likewise, fall in imports deepened
to 17.3 percent from 5.5 percent. All in all, the foreign trade
balance contributed negatively to GDP growth by -2.3 points.
Early this month, Insee had forecast the second largest euro
area economy to rebound about 19 percent in the third quarter and
grow 3 percent in the fourth quarter. According to the Summer
Forecast, released by the European Commission this month, France's
GDP will shrink 10.6 percent this year. The economic recovery will
remain on track in 2021, with GDP expanding 7.6 percent, EU
said.
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