As the economic impact from the coronavirus begins to emerge, French officials are expecting the country’s gross domestic product to decline 8 percent this year, finance minister Bruno Le Maire said Tuesday.
Speaking on the French television channel BFMTV, the minister announced the downward revision, from a previous projection of a 6 percent decline, the day after French President Emmanuel Macron announced a gradual lifting of the countrywide lockdown starting on May 11. Activities like commerce and schools will open up first, while restaurants, museums, cafés and cinemas will open at a later stage, and large festivals will be canceled until at least mid-July, Macron said, pledging to reinforce efforts to aid struggling industries, including tourism.
The economic impact of lockdown measures in France, implemented since mid-March, has been steep, with the country’s statistics agency INSEE estimating declines in activity to around a third of normal levels.
The public deficit is projected at around 9 percent of GDP with debt at 115 percent in 2020.
The French government is tackling the economic crisis by seeking to ward off bankruptcies and maintain as much employment as possible, offering partial unemployment measures to keep the links between businesses and workers, so that economic activity can resume quickly when the lockdown is lifted. More than 8,000 workers are signed up for partial unemployment, at a cost of 24 billion euros, according to Le Maire, who noted the system was meant to save the state from paying full unemployment, which would be more costly, reaching more than 100 billion euros in his estimate.
Financial assistance packages are being reinforced, with additional funds for small and independent companies, the government also said.
The International Monetary Fund, which expects growth to be down 7.5 percent this year in the euro area, has dramatically lowered projections for the global economy.
On a global level, the IMF is projecting a 3 percent drop in growth this year, a 6.3 percentage-point downgrade from expectations in January, which it described as a “major revision over a very short period.” The IMF said it will be the worst recession since the Great Depression.
This article first appeared on WWD.