INSEE now anticipates a fall in gross domestic product (GDP) of 17% in the second quarter, against 20% in its previous estimate, thanks in particular to an acceleration in the recovery of activity in June.
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Economic recovery "very clear since mid-May"
The recovery of the French economy is "very clear since mid-May, after a month of April which will undoubtedly be remembered as one of the worst (...) in peacetime", indicates the National Institute of Statistics in its latest state of affairs. Activity should therefore remain in June 12% lower than it would have been in a "normal" situation, but it is much better than the activity losses of April (-29%) and May (- 22%).
However, the latter have been downplayed by INSEE compared to its previous forecast published at the end of May, thanks to more precise data showing in particular that business services have performed worse than expected. Overall, "the recovery in activity would materialize in all branches of the economy", with a loss of activity halved in construction in June compared to May, and limited to 15% in industry and market services.
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A rise faster than expected?
In addition, the strengthening of deconfinement announced by the President of the Republic on Sunday, "could lead to a more rapid recovery than in the past month of economic activity" in certain sectors such as hotels and restaurants, judges INSEE. "The ups and downs are therefore rather on the rise" in the short term, estimated Julien Pouget, head of the economic department of INSEE during a press conference, which could hint at a faster than expected recovery.
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"But that does not make it possible to predict the moment when activity will return to its pre-crisis level", he added, INSEE did not publish at this stage a forecast of the extent of the recession in 2020. The data paint "a contrasting portrait of the recovery", he also noted, with sectors even more or less affected, a strong maintenance of telework and a rebound in household consumption just after the deconfinement which seems "sustainable", with a loss of consumption estimated at 5% in June compared to normal.
The future of this recovery will depend on the impact and duration of health protocols in businesses, the consumption and investment behavior of households and businesses, and finally the international context which remains "uncertain", notes the Insee.