France saw its sharpest economic contraction since World War II in the first quarter as a lockdown from mid-March left shops shuttered and consumers hunkered down at home, official data showed on Thursday.
FILE PHOTO: A view shows La Defense business district near Paris during a lockdown imposed to slow the spread of the coronavirus disease , in France, April 15, 2020. REUTERS/Gonzalo Fuentes
That marked the second consecutive quarter the economy contracted, after shrinking 0.1% in the fourth quarter of 2019, meaning it is technically in recession. The slump even exceeded most economists’ expectations, which on average were for -3.5%, although estimates in Reuters poll went as low as -7%. INSEE said consumer spending, usually the driver of the French economy, dropped 6.1% in the first quarter from the previous three months while business investment plunged 11.4%.The lockdown is due to begin winding down from May 11, but the government has warned that bankruptcies and unemployment are likely to spike upwards in its wake.
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