Lockdowns caused worst recession since WWII in France

PARIS

The two coronavirus lockdowns in 2020 caused the French economy to suffer its worst economic marker since World War II, the National Institute of Statistics and Economic Studies (INSEE) said Friday.

The gross domestic product (GDP) fell 8.3%, said the Paris-based bureau in a report on the first estimate of the economic effect of the fourth quarter.

The estimate is slightly better than the group’s earlier forecasts of a decline of 9% and 11% by the government.

The GDP was 5% below its level a year earlier (year-on-year change), whereas the year-on-year decline was 18.8% in the second quarter, it noted.

Due to lockdowns and curfews during October and December, GDP, in terms of volume, fell 1.3% owing to the loss in economic activity.

Household consumption expenditure also declined 5.4% as several non-essential businesses, shops and commercial establishments remained closed.

Foreign trade grew 0.9 points and offered signs of recovery as the sector saw improvements in exports like transport equipment and pharmaceuticals.

Overall, the report cited the total loss of activity was “much more moderate than during the first lockdown in March-May.” Because the impact was more felt on the demand side rather than on production, inventory changes contributed more than 0.4 points to GDP growth, compared to minus 1.7 in the third quarter.