An employee prepares customer’s orders at a grocery store in Bretigny-sur-Orge, near Paris, France. Reuters
France's economy shrank by nearly 14% in the second quarter, when the country was in coronavirus lockdown. It was the third consecutive quarter of negative growth in a worsening recession, the national statistics agency said Friday.
The startling plunge of 13.8% in April-June, compared to the same three-month period in 2019, starkly illustrated the punishing economic cost of the two-month lockdown. The pain was so damaging to jobs and industries that the government is talking down the possibility of another nationwide lockdown as infections tick upward again.
France's economy was already slowing, shrinking by 0.2% in the last quarter of 2019, before the coronavirus pandemic hit with full force.
Readjusted figured released Friday by Insee, the French statistics agency, showed that the economy shrank by 5.9% in the first quarter of 2020, as floods of COVID-19 patients started to overwhelm hospitals, prompting the lockdown. Insee's earlier estimate was of a 5.3% first-quarter plunge.
France is faring worse than Germany, Europe’s largest economy, which on Thursday reported a 10.1% plunge in GDP during the April-June period as its exports and business investment collapsed.
In March, the health crisis prompted the French government to introduce what was one of Europe's strictest lockdowns, halting much activity in the second-largest economy of the countries that use the euro currency. In France, COVID-19 has now killed more than 30,000 people and infected more than 186,000.
In releasing its morose figures Friday, Insee said the economic low point was in April, when only workers deemed essential were able to leave their homes. Activity started to pick up again from May as authorities began to ease lockdown restrictions, Insee added.
Insee's figures showed that the construction industry was among the hardest-hit, as worksites stood idle, with laborers forced to stay home.
Locked-down families, many surviving on government handouts and job-preservation schemes, tightened their purse strings: Insee reported an 11% plunge in household spending in April-June, following a drop of 5.8% in the first quarter.
Trade was also battered, as global lockdowns grounded flights, closed borders and factories, and threw transport into disarray. French imports, already down by 5.5% in the first quarter, shrank further in the second quarter, down 17.3%.
The damage to exports was even more pronounced, down by a whopping 25.5% in the second quarter after retreating by 6.1% in the first quarter.
Britain officially entered recession in the second quarter after gross domestic product (GDP) contracted by 2.2 per cent in the first three months of the year. The technical definition of a recession is two quarterly contractions in a row.
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A string of positive indicators from China to the US in recent weeks — as well hopes for a vaccine and the easing of lockdowns around the world — has added fuel to a global rally that has lifted equities out of the March depths.
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