The government is preparing for the heavy economic consequences of containment. French gross domestic product (GDP) is expected to fall by 6% this year with an explosion in the public deficit to 7.6%, announced on Thursday Economy Ministers Bruno Le Maire and Public Accounts Gérald Darmanin in an interview with Echoes .
"This is the biggest recession in France since 1945. Unknowns remain and this forecast may still evolve, especially with regard to the duration of confinement and the terms of exit," said Bruno Le Maire, who also tables on a "gradual" recovery. This new forecast will be incorporated into the amending finance bill presented next week in the Council of Ministers and examined in the process in Parliament.
Two months of confinement
Each week of containment weighs a little more on the activity of companies and further aggravates the economic recession. This collapse of 6% of GDP would thus correspond to a confinement of two months, that is to say until mid-May, according to INSEE estimates.
To face this unprecedented health and economic crisis, and to implement the presidential “whatever it costs”, the government also had to beef up its emergency plan. Faced with the growing needs of businesses in terms of load deferrals and partial unemployment in particular, it will drop from 45 to 100 billion euros. “Exceptional” spending dedicated to health will also increase from 2 to 7 billion euros.
Exploding public debt
As a result of this recession and the strengthening of support measures, the public deficit will climb to 7.6% of GDP and the public debt will explode to 112% this year, warned the ministers. “This debt meets an imperative: to avoid corporate bankruptcies and the sinking of our economy. In the long term, it is necessary to have sound public finances and reduce the debt, ”defended Bruno Le Maire.
The draft revised budget also provides for bonuses for nursing staff and certain civil servants, the amounts of which are still "in arbitration".
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