France GDP Q1 2020


France: Sharpest contraction ever recorded in Q1; economy enters recession

May 29, 2020

GDP shrank 5.3% on quarter-on-quarter seasonally-adjusted basis in the first quarter, down from Q4 2019’s 0.1% dip and marking the sharpest contraction on record.

Household spending fell to 5.6% in Q1, marking a record drop (Q4 2019: +0.3% quarter-on-quarter seasonally-adjusted). Public spending dropped 2.0% in Q1 (Q4 2019: +0.5% qoq s.a.). In addition, fixed investment plunged 10.5% in Q1, compared to the 0.1% expansion logged in the previous quarter.

Exports of goods and services fell 6.1% in the first quarter, down from Q4 2019’s 0.4% dip. Meanwhile, imports of goods and services declined 5.7% in Q1 (Q4 2019: -0.7% qoq s.a.). Taken together, the external sector made a neutral contribution to overall GDP in Q1, down from Q4 2019’s 0.1 percentage points contribution.

On an annual basis, economic activity dropped 5.0% in Q1, contrasting Q4 2019's 0.9% growth.

The economy will likely shrink this year, ravaged by Covid-19. Raising unemployment and social distancing measures should dampen private consumption, while heightened uncertainties over the length of the pandemic will likely curtail fixed investment. Moreover, the country’s fragile fiscal conditions are set to deteriorate further ahead.

FocusEconomics Consensus Forecast panelists project GDP to fall 9.0% in 2020, which is down 1.8 percentage points from last month’s estimate. For 2021, the panel sees economic growth of 6.4%.

Author:, Economist

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France GDP Chart

France GDP Q1  20 20 0

Note: Quarter-on-quarter changes of seasonally-adjusted GDP and year-on-year variation in %.
Source: National Institute of Statistics and Economic Studies (INSEE) and FocusEconomics Consensus Forecast.

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