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Record collapse of French economy by 14% in second quarter

France's economy shrank by a record nearly 14% in the second quarter of 2020 with a view to collapse in household consumption, business investment and trade, as from mid-March to early May the country found itself under blockade and strict quarantine measures aimed at limit the spread of coronavirus infection.
This shows express data of the French official statistics Insee, transmits BNR.

France's gross domestic product (GDP) shrank in April - June by a target of 13.8% compared to the first quarter of the year, which decreased by 5.9% (a downward correction from a previous 5.3% decrease estimate), confirming the existence of a very deep recession in the second largest economy of euro area.

Because of the coronavirus pandemic, France found itself under a real blockade from mid-March to 11 May, when the gradual abolition of strict restrictive measures and the restart of economic activity began, and from June 2nd it was allowed to open cafes and restaurants.

Insee noted that phasing out restrictions related to the spread of Covid-19 resulted in a gradual recovery in economic activity in May and June following the bottom reached in April.

The dramatic fall in French GDP by 13.8% is deeper than the 10.1% economic downturn in Germany, where the government managed to better cope with the spread of Covid-19 and the number of deceased and did not impose such strict restrictive measures and closures as in France.

However, expectations in financial markets were for an even sharper contraction of France's economy in the second quarter by around and above 15 per cent, with even official statistics Insee predicting earlier this month that GDP would see a 17 per cent drop.

In the same latest analysis of Insee there was a projected economic growth of 19% in the third quarter and a further 3% in the last quarter of the year, with economic activity at the end of 2020 expected to be between 1% and 6% below pre-crisis levels.

On an annual basis, France's GDP decreased in the second quarter by 19.0% (compared to the same period of the previous year), with expectations of a decrease of 20.0% and after a decrease of 5.7% in the first quarter (a downward revision from a previous estimate of a decrease of 5.0%).

The breakdown in terms of individual indicators shows that household consumption collapsed in the second quarter by 11% after a 5.8% decline and in the first quarter, gross fixed capital formation shrank by a whopping 17.8% after a 10.3% drop at the start of the year.

Government spending shrank by 8.0% after a 3.5% decrease in the first quarter.

French exports dropped by a whopping 25.5% after a 6.1% drop in the first three months of the year, while imports fell 17.3% after a 5.5% decrease in the previous quarter, with the net trade balance taking 2.3 points of French GDP.