French economy to shrink by 20% in second quarter as recession deepens

Issued on: 27/05/2020 – 09:12Modified: 27/05/2020 – 09:12

France's economy is on course to contract 20% in the second quarter from the previous three months as the country emerges from a nationwide coronavirus lockdown, the INSEE official statistics agency estimated on Wednesday.

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That would mark a sharp deterioration in France's recession after the euro zone's second-biggest economy contracted 5.8% in the first quarter.

INSEE said the economy could contract 8% for the whole of 2020 in the unlikely scenario that activity returned to pre-crisis levels by July.

INSEE estimated that France's economic activity was running at 21% below normal levels after the lockdown in place from mid-March was lifted on May 11. Activity was down 33% in early May.

Consumer spending was only 6% below normal levels since most stores were allowed to re-open after nearly two months, a sharp improvement from the 33% seen in early May.

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