France will today release preliminary third quarter growth statistics.
European markets are floundering as an alarming rise in COVID-19 infections in recent weeks threatens the prospects of a near-term economic recovery. The recession France entered earlier this year is deepening, with the outbreak continuing to take a toll on consumption, investment and foreign trade. According to the French central bank, the economy is expected to contract by 10% in 2020 before rebounding. As French President Emmanuel Macron and German Chancellor Angela Merkel implement new lockdown measures, France’s benchmark index for its stock market, Cotation Assistée en Continu (CAC) slid 3.4%. The prospect of a double-dip recession is rising as other European markets followed course.
Expect France’s economic performance to remain volatile for the remainder of 2020 and early 2021, with the current viral resurgence likely to hamstring economic recovery in the short term and usher in an era of financial uncertainty. Macron’s $118 billion stimulus plan is intended to address short- and long-term problems by including wage subsidies, tax cuts for businesses and funding for the transition to a greener economy. Nonetheless, without better control of the pandemic, it is difficult to determine when the French economy will return to normal.
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