France cuts its 2020 GDP forecast to an 11% contraction

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The French government has downgraded its gross domestic product forecast for 2020, in order to take into account the impact of the latest coronavirus restrictions.

The second largest economy in the euro zone is expected to contract by 11% this year, Economy Minister Bruno Le Maire said in an interview with France Inter radio on Friday. The French government’s previous forecast was for a 10% contraction.

French President Emmanuel Macron on Wednesday announced severe restrictions aimed at curbing the spread of the pandemic. A nationwide lockdown, starting on Friday and lasting at least a month, will force people to stay in their homes while restaurants, bars and shops deemed non-essential close.“We will have a difficult fourth quarter because we will be confined,” said Le Maire.

However, the revision of the 2020 forecasts was “moderate” thanks to the “strong rebound” of the economy in the third quarter, said the minister.

The French economy grew by 18.2% in the third quarter after falling 13.7% in the second quarter, the French statistical agency Insee said on Friday in a first estimate for the period.

Write to Maria Martinez at [email protected]

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