Economic recession, end of chapter one. In 2020, France’s Gross Domestic Product (GDP) has collapsed by 8.3%, because of the huge health and economical crisis related to Covid-19, according to data released this Friday January 29 by the Insee. According to Mathieu Plane, from the French Economic Policy Institute, “it’s the greatest fall recorded since WWII”.
Yet, data shared by the INSEE are not as catastrophic as expected. Towards the end of the year, the National Institute for Statistics and Economic Studies bet that the GDP would collapse by 9% in 2020. But the organization's results show the French economy resisted the Covid-19 bomb better than thought. And it is especially during the second lockdown, in the Fall, that the PIB decreased less harshly than expected, including only -1.3% nationwide.
Moreover, the government already announced the GDP would decrease by 11% over the year, even though Bruno Le Maire warned against the "cautious" aspect of this projection. During the last quarter of 2020, the INSEE warns the GDP "is 5% below its level from one year before" with a consumption decrease estimated around -5.4% because of the closure of stores. The investment still increases: +2.4%.
Yet, during the second quarter 2020, the INSEE warned already. The first data they though "fragile" and that could evolve over the course of the coming months. Furthermore, they explained the projection of an increasing GDP in the first quarter of 2020 was reviewed downwards (0.6 point) and was then set at -5.9%.
It is the third quarter of the year in a row that France's GDP decreases, already placing the country in economic recession. The government’s stake is to make agents confident again to relaunch the production-consumption dynamic, especially with a recovery plan of over 100 billion euros.
