French architecture in France

France GDP Q1 2020

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

Economic activity shrank a seasonally-adjusted 5.8% quarter-on-quarter in Q1 2020, marking the sharpest contraction ever recorded, according to a first estimate by the French Statistical Institute (INSEE) on 30 April. The print came on the heels of a 0.1% dip in Q4 2019 and overshot analysts’ expectations of a milder 3.5% drop. In year-on-year terms, the economy contracted 5.4%, contrasting a 0.9% expansion in the previous quarter.

Economic activity fell across the board as Covid-19 ravaged the economy in March. Household spending collapsed by 6.1% on a quarterly basis (Q4 2019: -0.3% quarter-on-quarter seasonally-adjusted) as lockdown measures hindered consumption, while government spending fell 2.4%, contrasting a 0.5% expansion in Q4 2019. Furthermore, capital spending plunged 11.8% (Q4 2019: 0.0% qoq s.a.) as companies held on to cash amid muted revenue and postponed their investment decisions.

On the external front, exports contracted 6.5% in Q1 (Q4 2019: 0.0% qoq s.a.), on the partial standstill of global trade prompted by the virus. Similarly, imports dropped 5.9% from a 0.3% dip in the previous quarter. Taken together, the external sector subtracted 0.2 percentage points from the headline reading, contrasting a 0.1 percentage point contribution in Q4 2019.

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.

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest