Covid-19: massive recession for France in 2020, drop of 8.3% of GDP over the year

Pandemic obliges, the French economy underwent a massive recession in 2020. The gross domestic product (GDP) fell by 8.3%, according to a first estimate published Friday by Insee but which is however less bad than what the institute anticipated.

INSEE was indeed forecasting a plunge in GDP of around 9%, while the government was forecasting a fall in GDP of 11% in 2020, while acknowledging that this was a cautious forecast.

However, the French economy resisted the second confinement better in the fall.

GDP declined by 1.3% in the last quarter alone, penalized above all by the fall in household consumption while investment and foreign trade recovered.

GDP fell in the fourth quarter (–1.3%), marked by the second confinement;

over the year 2020, it goes back ... https: //t.co/kLPJUbsh9O

- Insee (@InseeFr) January 29, 2021

During this second confinement, the loss of activity was "much more moderate than that observed during the first confinement of March-May 2020" and in the last quarter, the GDP "was 5% lower than its level a year earlier" , underlines INSEE.

Consumption thus fell again "sharply" by 5.4% over the period, due to the closures of shops, after a rebound of 18.2% in the previous quarter.

Conversely, investment continued to recover, up 2.4%.

Very disrupted trade

In addition, exports increased more than imports for the second consecutive quarter (+ 4.8% for the former against + 1.3% for the latter), which means that foreign trade contributes positively to the evolution of GDP in the last quarter.

After growth of 1.5% in 2019, one of the most important in the euro zone, the year 2020 will be that of a record recession for France since World War II.

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The Covid-19 epidemic, by pushing the government to stop or severely restrict economic activity to contain contamination, notably resulted in a drop in household consumption of 7.1% over the whole of the country. 'year.

Investment fell by 9.8%, while exports plunged 16.7% and imports by 11.6%, during a crisis that severely disrupted trade.