French Economy To Shrink 11% This Year – Minister

TRACKING___The French economy is expected to shrink 11 percent this year because of the coronavirus crisis, a “brutal” shock and worse than the government’s previous forecast of an eight percent contraction, Finance Minister Bruno Le Maire said Tuesday.

“The shock is very brutal,” Le Maire told RTL radio, though he said that “I am absolutely certain that we are going to bounce back in 2021.”

The business closures and confinement orders to halt the COVID-19 pandemic had left the economy gasping for air, he said, warning that “the hardest part is still ahead of us.”

The government has progressively revised upwards the damage caused by the pandemic and the latest estimate will be included in a recovery budget which will be submitted to ministers on June 10.

Last week, the official statistics agency INSEE warned that the economic contraction would be much larger than the government’s previous estimate of eight per cent, because the pickup as the virus lockdown was eased would only be gradual across the second half of the year.

The government has launched a series of massive aid packages, complete with billions of euros for key sectors such as tourism, the auto industry and aviation, to keep the economy afloat and plans a major programme by September to speed up the recovery.

Officials are progressively easing the restrictions imposed to curb the coronavirus outbreak, and Le Maire also announced that traditional mid-year sales by retailers would be pushed back to July 15 instead of June 24.

He said the delay had been requested by small-business owners who needed more time to prepare after being closed for more than two months.