Economy. Frances GDP fell by 8.3{7d3485657e94c2a51293ca186d4450b2f27c317aa7ee3509dac6c8bbf5461118} in 2020

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The French economy suffered a massive recession in 2020 as a result of the Covid-19 epidemic, with its gross domestic product (GDP) falling by 8.3{7d3485657e94c2a51293ca186d4450b2f27c317aa7ee3509dac6c8bbf5461118}. This emerges from a first estimate published by INSEE on Friday, which is, however, less bad than what the institute expected.

INSEE forecast a GDP drop of around 9{7d3485657e94c2a51293ca186d4450b2f27c317aa7ee3509dac6c8bbf5461118}, but the French economy withstood the second restriction better in autumn. In the last quarter alone, GDP contracted by 1.3{7d3485657e94c2a51293ca186d4450b2f27c317aa7ee3509dac6c8bbf5461118}, which was particularly adversely affected by the decline in household consumption, while investments and foreign trade recovered.

The government was expecting GDP to decline by 11{7d3485657e94c2a51293ca186d4450b2f27c317aa7ee3509dac6c8bbf5461118} in 2020, although the economy minister admitted it was a cautious forecast.

Moderate loss of activity in autumn

During this second limit, the loss of activity was 'much more moderate than during the first limit from March to May 2020', and in the last quarter GDP was '5{7d3485657e94c2a51293ca186d4450b2f27c317aa7ee3509dac6c8bbf5461118} below the level of the previous year', underlines INSEE.

Consumption fell again 'sharply' by 5.4{7d3485657e94c2a51293ca186d4450b2f27c317aa7ee3509dac6c8bbf5461118} in the reporting period due to the closure of stores after a recovery of 18.2{7d3485657e94c2a51293ca186d4450b2f27c317aa7ee3509dac6c8bbf5461118} in the previous quarter. Conversely, investments continued to recover and increased by 2.4{7d3485657e94c2a51293ca186d4450b2f27c317aa7ee3509dac6c8bbf5461118}.

In addition, exports grew faster than imports for the second quarter in a row (+ 4.8{7d3485657e94c2a51293ca186d4450b2f27c317aa7ee3509dac6c8bbf5461118} for the former versus + 1.3{7d3485657e94c2a51293ca186d4450b2f27c317aa7ee3509dac6c8bbf5461118} for the latter), which means that foreign trade made a positive contribution to the development of GDP in the last quarter.

Record recession since World War II

After a 1.5{7d3485657e94c2a51293ca186d4450b2f27c317aa7ee3509dac6c8bbf5461118} growth in 2019, one of the most important in the euro area, 2020 will be the year of a record recession for France since World War II.

In particular, the Covid-19 epidemic, which pushed the government to halt or curtail economic activity to curb contamination, resulted in a 7.1{7d3485657e94c2a51293ca186d4450b2f27c317aa7ee3509dac6c8bbf5461118} decrease in household consumption across the country. '

Investments fell 9.8{7d3485657e94c2a51293ca186d4450b2f27c317aa7ee3509dac6c8bbf5461118} while exports fell 16.7{7d3485657e94c2a51293ca186d4450b2f27c317aa7ee3509dac6c8bbf5461118} and imports 11.6{7d3485657e94c2a51293ca186d4450b2f27c317aa7ee3509dac6c8bbf5461118} during a crisis that severely disrupted trade.