What was to be feared will happen.

"In the fourth quarter, we will probably have a negative growth figure," the Minister of the Economy Bruno Le Maire warned Friday morning on Europe 1. This relapse of the French economy in the last quarter was already feared with the first measures of curfew and is now increasingly likely with the extension of restrictions announced Thursday night by the government.

“We knew that the epidemic could start again and (…) there are a lot of international uncertainties,” he said, adding that this possibility of a relapse in GDP has been incorporated into the recession forecast of 10 % of government for the whole year.

After the strong rebound in the French economy in the third quarter, driven by deconfinement, the context has deteriorated considerably since the start of the school year.

Decline in activity, particularly in services

Already in September, private sector activity had contracted, according to closely watched data from IHS Markit.

On Friday, the latter estimated that the decline in activity was accelerating in October, especially in services, due to restrictions imposed by the government to fight the epidemic.

The day before, INSEE had reported a deterioration in the business climate in October, in its monthly survey of business leaders.

After having imposed a curfew from 9 p.m. to 6 a.m. last week in Ile-de-France and eight metropolises to fight against the second epidemic wave, Prime Minister Jean Castex announced Thursday evening an extension of this curfew, which will now affect 46 million French people in 54 departments and Polynesia.

A bad omen for the holiday season

"French private companies now have only to hope that the latest measures imposed by the government will manage to slow the spread of the virus," said Eliot Kerr, economist at IHS Markit.

But according to him, with the winter approaching, "a marked drop in the number of cases and a total reopening of the economy however seem very unlikely", a situation of bad omen for the holiday season. “Usually crucial” for many businesses.

The most affected so far are those in the hotel and catering, events, leisure and culture sectors, penalized both by the curfew but also by very restricted operating conditions outside curfew to respect health rules.

"A global cost of just over 2 billion euros"

To avoid a massacre in the short term, the government has stepped up support measures, by expanding the solidarity fund, by extending access to loans guaranteed by the State and by increasing support for short-time working.

In total, if the curfew lasts six weeks in the designated departments, these measures represent "an overall cost of just over 2 billion euros", assessed Bruno Le Maire.

The day before, the Minister Delegate for Public Accounts Olivier Dussopt had estimated on BFM Business that these measures cost "between 1.3 and 1.5 billion euros per month".

"It's a lot of money", but "we are there," he had defended.

"If, beyond, the measures were to continue, we would recharge the devices," also warned Bruno Le Maire on Friday, assuring that the State would continue to help companies and employees as long as the epidemic lasts.

Aid "insufficient" according to the CPME

But for the Confederation of Small and Medium-Sized Enterprises (CPME), this aid is "insufficient and cannot be sufficient to cover all the economic losses caused by a government decision".

Above all, they do not concern companies in "sectors related" to those eligible for public support, and the organization is concerned about "the despair of many independents who find themselves cornered", after having already endured the repercussions of confinement to the spring.

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20 Minutes with AFP