Coronavirus to dampen French growth

PARIS (AFP) – The coronavirus is set to strike a severe blow to French growth in 2020, cutting several decimal points off a figure that may struggle to reach one per cent, the Finance Minister said yesterday.

Bruno Le Maire told French radio station France Inter that COVID-19 will cause an economic downturn of “several decimal points”, an increase from previous estimations.

The epidemic could cause growth to slump to under one per cent of GDP in 2020, he added.

But he refused to give a more precise number until the French government’s presentation for fiscal stability to the European Union (EU) on April 15.

Employment will be impacted, he warned, and said tax rebates are an option for companies particularly affected.

“Until the coronavirus, all indicators – investment, employment, innovation and growth – were positive.

“We can see that once the epidemic takes hold, the downturn is very brutal,” Le Maire said.

A “coordinated and massive European recovery plan” needs to be announced on March 16, when EU finance ministers will meet to address the economic impact of the virus, he said.

The European Central Bank has room for manoeuvre to support the economy and should incite banks to lend to small and medium-sized companies, he said.

Fears of a global pandemic caused oil prices to slump yesterday. Le Maire warned that while the decrease in oil prices is “very good news” for the consumer, it is less positive for the economy. “If the price of oil decreases too much, it worries the markets,” which can impact companies and the economy, he said.

French Economy and Finance Minister Bruno Le Maire, Junior Minister for Economy and Finance Agnes Pannier-Runacher (R) and Labour Minister Muriel Penicaud (L) attend a press conference after a meeting about the economic impact of the Coronavirus (Covid-19) outbreak, at the Economy Ministry in Paris yesterday. PHOTO: AFP