France in double dip recession as figures show worse-than-expected first quarter

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France in double dip recession as figures show worse-than-expected first quarter


France suffered a double-dip recession according to revised official figures which showed it had a poorer start to the year than previously thought.

Europe’s second-largest economy shrank 0.1% in the first quarter of 2021, sharply revised from an initial estimate of 0.4% growth, said statistical agency INSEE.

It was the second straight quarter of contraction – the definition of a recession – after the economy shrank 1.5% in the last three months of 2020.

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Emmanuel Macron’s government has spent tens of billions in an attempt to support the economy Pic: AP

France had already been dragged into recession earlier in 2020 due to the pandemic, which means it has now suffered a so-called ‘double dip’.

At the end of March of this year, the French economy was still 4.7% below its level at the end of 2019, according to INSEE.

The latest revision, reflecting a worse-than-expected performance for the construction sector, highlights the challenges France and its European neighbors face as they grapple with a new wave of COVID-19[feminine[feminine infections this year.

The government of President Emmanuel Macron has spent tens of billions of euros in an attempt to support the economy and protect jobs during the crisis.

But a resurgence of cases has led the country to enter a third national lockdown, causing further difficulties for the economy with new figures showing household spending fell 8.3% in April – the start of the second trimester.

The restrictions are now lifted and Finance Minister Bruno Le Maire this week maintained his 5% growth forecast for 2021.

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The latest restrictions have started to fade

He said the crisis “is moving behind us, although we have to be careful”.

Germany, Europe’s largest economy, also contracted in the first quarter, although a period of growth at the end of 2020 meant it was not in a recession.

Likewise, UK GDP fell 1.5% during the January-March period of this year – thanks to the last lockdown – but had risen in the fourth quarter, meaning it avoided a double dip.

Overall, the UK economy shrank 9.8% in 2020, worse than any other country in the G7 group of major advanced economies. French GDP contracted by 8%.

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