France experienced in the spring the strongest decline in its activity since at least 1949, with a plunge in gross domestic product (GDP) of 13.8% in the second quarter, more than the European average or than Italy.
Since it measures French economic activity on a quarterly basis, the National Institute of Statistics and Economic Studies (INSEE) had never recorded such a collapse.
It also revised its measure of activity in the first quarter, which fell 5.9%, down from the 5.3% previously reported.
The largest quarterly decline in GDP in France before the coronavirus crisis was recorded in the second quarter of 1968, affected by the general strike in May, which was followed by a rebound of + 8% in the summer.
The fall in GDP in the second quarter, however, is less than what most analysts expected and INSEE itself, which was still forecasting 17% in June.
The figure of 13.8% is "less severe than expected", judged on CNews the Minister of the Economy Bruno Le Maire, which proves according to him that "we are not powerless in the face of the crisis", while it will present a stimulus plan on August 25, which will be added to the measures to support the economy already in place.
The collapse in activity remains greater in France than in most European countries: in Italy, however particularly affected by the Covid-19 epidemic, it is limited to 12.4%, in the whole of the euro zone GDP fell by 12.1%, in Germany by 10.1%.
"Today's figures show that there has been a heavy price to pay for the confinement imposed on the French economy, which contracted more than its American and German counterparts in the second quarter," noted in a note Julien Manceaux, economist at ING bank.
The confinement period was very long during the second quarter in France, until May 11.
In detail, household consumption, the main component of growth, fell by 11%, the production of goods, goods and services sagged by 14.2%, with a further plunge in manufacturing industry, by 16.8%.
Investments plummeted by 17.8%, exports by 25.5%, while imports fell by 17.3% over the quarter.
"Regarding services, spending on transport services (−45.8%) and accommodation and catering (–56.9%) collapsed, in connection with the administrative restrictions implemented to fight against pandemic ", reports INSEE.
In general, "the negative evolution of GDP in the first half of 2020 is linked to the cessation of" non-essential "activities in the context of the containment put in place between mid-March and the beginning of May," explains the institute.
- persistent sub-activity -
"We are going to fight to do better than the -11%" planned for the whole year by the government ", promised Bruno Le Maire while the government is more pessimistic than INSEE, which forecasts a limited recession at 9% for 2020.
The rebound in the summer should be commensurate with the air hole in the second quarter: Insee has forecast a 19% increase in GDP for the third quarter, the Natixis bank 16% and the Banque de France 14%.
Several indicators published last week confirm the good dynamics of the French economy, such as the recovery in activity in July as measured by the Markit firm or the renewed confidence of business leaders.
But household morale, which had started to recover in June following deconfinement, sagged again in July.
And if consumption has generally recovered well, the start of sales was "not very dynamic", according to the Procos federation of specialized trade.
The share of French people who believe it is appropriate to save is increasing for the third consecutive month, while the mobilization of the 100 billion euros in additional savings planned for this year will play a decisive role in the recovery.
"In June we are still at -10% of activity and it will be our cruise regime until the end of the year," Selin Ozyurt, economist of the credit insurer, told AFP Euler Hermes, specifying that this sub-activity concerns "above all certain sectors such as construction, hotels, restaurants or transport".
And "we will not return to pre-Covid-19 GDP levels before the third quarter of 2022, against the end of 2021 initially envisaged, because international trade is not picking up", according to her.
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