France slips into recession in first quarter

France, the eurozone’s second biggest economy, fell into recession in the first quarter of 2021 with a 0.1 percent contraction, revised official data showed on Friday, Reuters reports.

The INSEE statistics office revised its GDP reading sharply down from +0.4 percent, saying data from the construction sector had been much weaker than its extrapolation had suggested.

It followed a 1.5 percent contraction in the final three months of 2020.

A revision of half a percentage point is highly unusual in France and underscores the challenges governments have faced in responding to the coronavirus pandemic as it roils economies around the globe.

In a further sign of difficulties, household spending, the driving force of France’s economic activity, fell by 8.3 percent in the first month of the second quarter after President Emmanuel Macron ordered a third national coronavirus lockdown. That stay-at-home order is now being slowly unwound.

Finance Minister Bruno Le Maire on Thursday stuck to his growth forecast of 5 percent for 2021 and said the crisis was “moving behind us, though we must remain cautious.”

Full year 2020 GDP was slightly better than expected at -8 percent versus a previous estimate of -8.2 percent, INSEE said.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.