The French economy was already contracting in the last quarter of 2019, before the coronavirus pandemic hit hard. For France and other major economies, this caused a dizzying decline.
“All of the GDP growth observed during the decade 2010-2019 was wiped out in five months,” said Marc Ostwald, chief economist at ADM Investor Services International. In the case of Italy, economists said that wiped out about 30 years of growth.
As lockdowns have eased and many businesses have reopened, it is hoped that the recession will be short-lived, although a rise in contagions in many countries remains a risk.
France is doing less well than Germany, Europe’s largest economy, which on Thursday announced a 10.1% drop in GDP during the April-June period as its exports and business investment declined. are collapsed. Germany’s decline was also the largest since quarterly growth figures began to be compiled in 1970, according to the official statistics agency.
In March, the health crisis prompted the French government to introduce what was one of the strictest lockdowns in Europe, halting much of activity in the second-largest economy in countries using the euro. In France, COVID-19 has now killed more than 30,000 people and infected more than 186,000.
In publishing its gloomy figures on Friday, INSEE indicated that the economic low point was in April, when only workers deemed essential were able to leave their homes. Activity started to pick up again from May as authorities began to ease lockdown restrictions, INSEE added.
Figures on Friday showed the construction industry to be among the hardest hit in France, as construction sites remained idle as workers were forced to stay at home.
Locked-in families, many of whom survived on government aid and job preservation programs, tightened their purse strings amid fears about jobs, but also because stores were closed. Household spending plunged 11% in April-June, after falling 5.8% in the first quarter.
Trade was also hit hard, as global lockdowns blocked flights, closed borders and factories, and threw transportation into disarray. French imports, already down 5.5% in the first quarter, fell further in the second quarter, down 17.3%.
Damage to exports was even more pronounced, falling 25.5% in the second quarter after declining 6.1% in the first quarter.
Hatton reported from Lisbon, Portugal. Fran D’Emilio in Rome contributed to this report.