French GDP Plunged 8.3% in 2020

With the second confinement introduced from October to November, we could fear the worst. But ultimately, the French economy resisted the second confinement better than the first. And in the fourth quarter alone, GDP fell by 1.3%. Over this period, GDP was 5% below its level a year earlier (year-on-year), while the decline over one year amounted to 18.8% in the second quarter, explains INSEE.

As a direct consequence of this limited underperformance and of the health crisis which was the common thread throughout the year, the French economy suffered a massive recession in 2020. GDP in fact finally fell by 8.3 %, according to an initial estimate from INSEE. Little consolation for the executive: it is ultimately less bad than predicted INSEE, which until now had counted on a plunge of around 9%.

While the executive is considering new restrictions and the establishment of a third lockdown is one of the hypotheses that are on the desk of Emmanuel Macron, the figures published by INSEE will undoubtedly be examined at the magnifying glass by the executive. Even if this is only a first estimate.

If the fact that the economy was in recession last year is not a real surprise, the data unveiled this Friday make it possible to gauge the effects of the two confinements introduced to fight against the Covid-19 pandemic. The figures are clear: growth was less penalized by the second confinement, less strict than the first.

While the first confinement had brought a halt to the entire economy, “the effect of the second confinement is reflected mainly in household consumption expenditure”, explains INSEE. they fell “again sharply”: -5.4% in the fourth quarter, after a strong rebound of 18.2% in the previous quarter and a drop of 11.6% in the spring.

On the other hand, investment continued its recovery (+ 2.4% n after + 24.0%) and total production “fell only moderately (-0.7%) due to the increase in the production of goods. »N which rose by 2.3%. An increase carried, according to public statisticians, by “the manufacturing industry which seems little affected by the second confinement”.

Illustration of the closure which has been the rule in places open to the public, production “clearly drops” in market services. The decline reached 2.2% after an increase of 15.6% in the previous quarter.

For its part, foreign trade continues to recover. For the second consecutive quarter, exports increased more than imports. And ultimately, foreign trade contributes positively to GDP growth at the end of the year.

Household consumption spending on goods rebounded sharply in December. With an increase of 23% (after a drop of 18% in November) they now exceed their level of December 2019.

 

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