Coronavirus: towards a “significant” slowdown in growth in France

"Now that the epidemic affects many more countries, especially France, the impact of the coronavirus on French growth will be much more significant" than what was expected when the coronavirus was limited to China, estimated Bruno Le Maire, the Minister of Economy on France 2.

Initially, the government had considered whether the coronavirus epidemic had been limited to the sole perimeter of China to a loss of growth for France of 0.1 point in 2020.

📈 Economic impact of #CoronavirusFrance: "We will unlock what it takes to help French companies" ensures @BrunoLeMaire

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So far, the government has so far forecast growth of 1.3%. The Banque de France, which forecasts 1.1% growth in 2020, has already announced that its forecast should be lowered when it is next published on March 23.

The OECD has significantly revised down its growth forecasts for 2020. Global growth should be 2.4% compared to 2.9% previously. The eurozone should drop from 1.1% to 0.8%. In France, the fall would also be brutal, going from 1.2% to 0.9%.

For the moment, Bruno Le Maire has refused to give a more precise estimate. In the meantime, the Minister of the Economy said he was ready to "unlock what it will take" to come to the aid of French businesses: "We will show total solidarity with all the entrepreneurs who today are on the front line, "he added.

Finance Ministers' Meeting

According to him, the coronavirus is considered "a case of force majeure". "We will bear this cost," he said.

Faced with this situation, the G7 finance ministers and those of the Eurogroup will meet this week by telephone to "coordinate their responses" to the impact of the coronavirus on global growth.

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In addition, Bruno Le Maire has already met with his American counterpart, Steven Mnuchin, whose country this year chairs the group of the seven richest countries on the planet.

However, the purses take again colors

This caution comes as the global stock markets which unscrewed last week are starting to rise again on Monday.

From London to Paris, the main world indices have picked up colors. The CAC 40 Paris opened sharply higher (+ 1.99%) on Monday, after a 3.4% plunge to nearly 5,310 points. In the middle of the morning, it still registered an increase of 1.47%. In Japan, the Nikkei gained 0.95%.

The same goes for the Chinese stock markets which closed sharply higher on Monday. The Shanghai Stock Exchange composite index finished up 3.15% to 2,970.93 points.

For its part, Shenzhen, second place in mainland China, gained 3.77% to 1,869.65 points. Investors who took many profits last week seem to be reassured by announcements from government central banks to support weakened economies.

Very clearly, investors in the United States expect in particular a rate cut by the Federal Reserve at its next meeting on March 18. The Fed chairman said the central bank would use all of its tools "to support the economy appropriately."