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