French economy to bounce back as lockdown lifted

PARIS (AFP) – France’s economy, which like those of other countries was pushed into a bruising recession by the coronavirus, will bounce back now that lockdown measures are lifted but will still contract over the year as a whole, official data showed yesterday.

France’s gross domestic product (GDP), which had shrunk by a record 13.8 per cent in the second quarter, is forecast to grow by 17 per cent in the subsequent three months, the national statistics office Insee calculated.

Nevertheless, the rebound was not quite as strong as expected and Insee said it was sticking to its forecast for an overall economic contraction of nine per cent for the year as a whole.

If the easing of lockdown measures “has enabled a relatively rapid rebound in parts of economic activity,” the economy is returning after the summer break “rather like an engine that is being cranked up and choked at the same time,” Insee said.

While activity in key areas such as air transport and culture and entertainment continued to be throttled by the coronavirus restrictions, some sectors were still benefitting from the emergency economic measures put in place by the government, the statisticians said.

Insee pointed to the risk of a “significant shock to demand”, with consumer spending and household confidence expected to remain below pre-crisis levels.