The business district of La Défense, in Paris.
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Christophe Ena / AP / SIPA
As we suspected, INSEE confirms it.
The French economy suffered a massive recession in 2020 under the impact of the Covid-19 epidemic, with a drop in gross domestic product (GDP) of 8.3%, according to a first estimate published this Friday by Insee , which is however less bad than expected by the institute, and the government.
This is a record for France since World War II.
In 2019, the country had experienced growth of 1.5% in 2019, one of the best in the euro area.
INSEE predicted a GDP plunge of around 9% in 2020, but the French economy resisted the second confinement better in the fall, with a GDP decline of 1.3% in the last quarter alone, especially penalized by the drop in household consumption while investment and foreign trade recovered.
For its part, the government was counting on a drop in GDP of 11% in 2020, even if the Minister of the Economy admitted that it was a cautious forecast.
A second confinement less bad for the GDP
During this second confinement, the loss of activity was "much more moderate than that observed during the first confinement of March-May 2020" and in the last quarter, the GDP "was 5% lower than its level a year earlier" , underlines INSEE.
Consumption thus fell again "sharply" by 5.4% over the period, due to the closures of shops, after a rebound of 18.2% in the previous quarter.
Conversely, investment continued to recover, up 2.4%.
Dynamic foreign trade but consumption at half mast
In addition, exports increased more than imports for the second consecutive quarter (+ 4.8% for the former against + 1.3% for the latter), which means that foreign trade contributes positively to the development of the GDP in the last quarter.
The Covid-19 epidemic, by pushing the government to stop or severely restrict economic activity to contain contamination, notably resulted in a drop in household consumption of 7.1% over the whole of the country. 'year.
Investment fell by 9.8%, while exports plunged 16.7% and imports by 11.6%, during a crisis that severely disrupted trade.
For 2021, INSEE forecasts a rebound in GDP of 3% in the first quarter, then an increase of another 2% in the second, under the assumption of a "gradual stabilization of the health situation".
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France
Economy
Coronavirus
Covid 19
GDP
Recession