The economic consequences of the coronavirus crisis are accumulating and are weighing heavily on France whose gross domestic product (GDP) fell by around 6% in the first quarter of 2020, according to an estimate published on Wednesday by the Banque de France. The epidemic has, in fact, shut down a large part of the economy and plunges the country into recession.
This estimate corresponds to the worst quarterly performance of the French economy since 1945. With the GDP having already declined by 0.1% in the fourth quarter, according to the latest data from the national statistics institute Insee, France is therefore technically in recession. Activity was notably lower by around a third (-32%) than normal over the last fortnight in March, according to the Banque de France's assessment, based on a survey of 8,500 companies.
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"We have to go back to the second quarter of 1968, marked by the events of May, to find a quarterly drop in activity of the same order of magnitude", but still lower, she details in her conjuncture note. GDP then fell 5.3%. In line with INSEE estimates, the French central bank estimates that each fortnight of confinement results in a 1.5% drop in GDP over a year. But she warns that this figure "should not be extrapolated improperly", the intensity of the effects of confinement may change as it lengthens. Started on March 17, it must last at least until April 15.
Sectors more affected than others
Analysis by the Banque de France confirms that most economic sectors have experienced sharp and brutal losses in activity, the most affected being those of construction, trade, transport, accommodation and catering. To materialize this decline, it notably took into account the days during which companies had to stop their activity during the last fortnight of March.
In market services, companies have experienced an average of 6 days of exceptional closure, but this goes up to 14 days for catering and 13 for hosting companies. Or almost total inactivity. Conversely, business services are doing better, with only one to three days of closure.
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The industry is also affected, with an average of 5 exceptional shutdown days over the period. And the production sites turned on average to 56% of their capacity in March, against 78% in February. However, this rate fell to 41% in the automobile and 46% in metallurgy, while the pharmacy (79%) or the food industry (71%) held up better.