PARIS – France’s central bank today said it expects economic activity to decline between 9% and 10% this year, a bigger drop than previously forecast due to a new lockdown.
While the new confinement measures will deepen the recession, Banque de France believes that they will be far less destructive than during the country’s first confinement earlier this year.
“Before the second wave, we thought the recession would be a little less than 9%. We think today that for 2020 as a whole, it will be between 9% and 10%,” said Banque de France chief Francois Villeroy de Galhau on RTL.
The bank in September forecast that economic activity, or gross domestic product, would decline by 8.7% this year.
But, that was before the rapid rise in Covid-19 cases in the country last month, which led the government to impose a second lockdown.
The bank estimated that the new lockdown will cost France’s economy 12% of GDP compared to a normal week in November.
Banque de France said economic activity was running 4% below pre-pandemic levels before the new lockdown was imposed at the end of last month.
Restaurants, non-food retailers and recreation activities are being hit the worst by the fresh restrictions.
But, the lockdown is somewhat less restrictive than the first, with more businesses allowed to operate, and the 12% drop in November activity pales in comparison with the 31% registered in April. – AFP, November 9, 2020
