France heading for worst post-war downturn, finance minister warns

File photo of French Finance Minister Bruno Le Maire
File photo of French Finance Minister Bruno Le Maire © François Mori, AFP

France will likely see its worst post-war economic downturn this year, far surpassing the minus 2.2 percent slump seen in 2009 after the global financial crisis, its finance minister said on Monday.


"We will probably be at more than the minus 2.2 percent in 2009. That shows the magnitude of the economic shock we are facing," Le Maire told the Senate in a hearing by teleconference.

The government estimated last month in an emergency budget update that the economy would contract 1 percent this year, but has since indicated that it would have to revise that figure.

"It's an indication of the amplitude of the economic shock we're facing," said Le Maire.

France imposed a nationwide stay-at-home order from March 17 after shutting all nonessential businesses. Officials have said the lockdown will last until at least April 15.

The statistics office Insee said last month that the lockdown has slashed overall economic activity by 35 percent, and estimated every month of shutdown would cut annual GPD by three percentage points.

Services, heavy industry and construction are all taking big hits, Insee said, as factories are shut and only a handful of business sectors, such as supermarkets and pharmacies, remain open.

A wave of French blue-chip companies have abandoned their profitability targets for the year, while employers' associations have warned that hundreds of smaller firms and shops risk bankruptcy.

The government has pledged €45 billion ($49 billion) in loan guarantees and other relief to help companies get through the crisis.

(FRANCE 24 with AFP and REUTERS)


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