Paris (AFP)

The French economy did not take long to collapse, hit head-on by the Covid-19 epidemic: from the first quarter gross domestic product (GDP) plunged, suggesting a recession of unprecedented magnitude in France this year.

According to an estimate published Wednesday by the Banque de France, the GDP fell by around 6% in the first three months of the year, the worst quarterly performance of the French economy since the end of the Second World War.

With GDP already down 0.1% in the fourth quarter, according to INSEE, France is therefore officially in a technical recession, which has resulted in two consecutive quarters of activity decline.

Barely a month ago, however, the Banque de France was still counting on a small growth of 0.1% in the past quarter, but that was before the epidemic spread massively over the territory and confinement was imposed on March 17.

In March alone, activity fell by 17%, revealing over the last two weeks less than a third (-32%) below normal, according to the survey carried out by the Banque de France with 8,500 companies.

Since 1945, only the second quarter of 1968 had experienced a collapse "of the same order of magnitude," she notes. GDP then fell 5.3%.

If in this context of uncertainty the French central bank does not advance on an annual forecast, it considers that each fortnight of confinement would lead to a loss of GDP of 1.5% over a year.

In late March, INSEE made the same estimate, citing a possible loss of 6 points of GDP this year if the confinement were to last two months. A scenario less and less improbable, while the executive plans to extend it beyond April 15.

The month of April will be "at least as bad as the last fortnight of March", already warned the governor of the Bank of France François Villeroy de Galhau, on RTL.

"Growth will be strongly negative in 2020," he said again, while anticipating a "rebound" in 2021.

- "avoid sinking" -

The government is also preparing minds for a dark scenario this year. Monday, the Minister of Economy Bruno Le Maire has already warned to expect a contraction of the economy "far beyond" the -2.9% recorded in 2009 after the financial crisis of 2008, worse performance of l French economy since 1945.

And the minister has repeatedly compared "the shock" to the great depression that followed the stock market crash of 1929, emphasizing the issue: "avoid the sinking".

Certain sectors are not very far away, such as air transport or tourism, affected from the spread of the epidemic in Asia, well before the start of confinement in France.

According to the Banque de France, the largest activity losses in March concerned construction, "with a fall of up to three quarters of normal activity", trade, transport, accommodation and catering.

The industry is barely holding up a little better with production sites which turned at just over half their capacity in March.

- "no time to count" -

By grouping together the most affected sectors, "ie manufacturing, construction and non-financial market services (which together represent 55% of GDP), the loss of activity represents approximately half of the normal level", details the Bank of France.

What justify the hundreds of billions of euros that the government is ready to mobilize to keep businesses alive and guarantee an income for employees.

"Today is not the time to count," said the Governor of the Banque de France. "In the coming economic battle (...) we do not count to save businesses, jobs and employees' incomes," he insisted.

However, he warned: "This cannot last forever and we all want us to move towards a gradual exit from confinement".

© 2020 AFP