France expects deeper recession as coronavirus lockdown prolonged

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Growth was uneven across eurozone countries, with Germany
euro

France has further lowered its 2020 economic forecast to a contraction of eight percent, from an earlier prediction of six-percent contraction, and would broaden its budget deficit to a postwar record due to an extended anti-coronavirus lockdown, Economy and Finance Minister Bruno Le Maire said Tuesday.

“The confinement is longer than what would have been anticipated for health reasons. Obviously, it will have a stronger impact on our national growth. We will have a growth forecast at -8 percent,” Le Maire told RMC radio.

“We must take all of these estimates with caution … We would like to be certain that we remain there,” the minister said.

In an update to the 2020 financial law, the second revision in less than one week, Budget Minister Gerald Darmanin predicted that France’s budget deficit would hit 9 percent of the gross domestic product (GDP) this year.

“Each day, each week of containment is worsening public finances,” Darmanin told France info radio in an interview.

“We are going from minus 7.6 percent of deficit…to minus 9 percent. Our country has never seen such a deficit since World War II,” Darmanin said.

On Monday evening, President Emmanuel Macron announced that the national lockdown would be extended till May 11 to further slow down the virus spread.

France’s current confinement measure, which started on March 17, is due to end on April 15. Enditem

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