Europe

French economy to shrink record 11% this year after ‘brutal’ coronavirus shock

Issued on: 02/06/2020 – 10:19Modified: 02/06/2020 – 10:19

The French economy is expected to shrink 11 percent this year because of the coronavirus crisis, which is worse than the government's previous forecast of an eight percent contraction, Finance Minister Bruno Le Maire said Tuesday.

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"The shock is very brutal," Le Maire told RTL radio, although he also said: "I am absolutely certain that we are going to bounce back in 2021."

France imposed one of the Europe's strictest lockdowns in the face of Covid-19 in mid-March and only began removing restrictions on May 11. Cafés, bars and restaurants are allowed to reopen for regular business on Tuesday. In Paris, they remain limited to outside seating only.

La réouverture des 308 000 cafés et restaurants de France ce 2 juin, avec ses 509 000 emplois, est un signal très positif pour notre économie et répond à une attente profonde des Français. C'est un moment de bonheur collectif. pic.twitter.com/zmLOh4jwru

— Bruno Le Maire (@BrunoLeMaire) June 2, 2020

"We were hard hit by the virus, we took effective measures to protect French people's health, but the economy practically ground to a halt for three months," Le Maire said.

"We're going to pay for it with growth," he said.

With some 300,000 cafés and eateries reopening on Tuesday, Le Maire said that they would continue to benefit from handouts from a government solidarity fund until the end of the year to help cover fixed costs.

>> France begins 'Phase II' of easing lockdown measures as coronavirus abates

"Even if it is hard to hear on a day when the sun is shining and the cafés are reopening, the hardest part is still ahead of us in social and economic terms," Le Maire said.

The government has progressively revised upwards the damage caused by the pandemic and the latest estimate will be included in a recoverRead More – Source