France will release its preliminary second quarter GDP figures today.
France’s National Institute of Statistics and Economic Studies (INSEE)—the country’s official statistics agency—expects today’s data to mark a 15-20% fall due to pandemic-induced upheaval, calling April “one of the worst months experienced by the French economy in peacetime”. France entered a recession earlier this year for the first time since 2009.
Expect France’s economic performance to remain volatile in the short-term with more robust recovery anticipated in 2021-2022. Alongside Italy and Spain, France was especially hard hit by the pandemic; while the EU’s overall GDP is slated to contract by 8.3% in 2020, French production is expected to recede by 10.6%. Although a historic $868 billion EU recovery fund will cushion the blow, COVID-19 has generated unprecedented economic uncertainty that will take time to dissipate; the lingering risk of a viral resurgence makes it impossible to determine when the French economy will return to normal. Expect the government to postpone contentious labour reforms as it focuses on addressing national recovery; negotiations over highly controversial pension reform have already been deferred to 2021.
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Sinan is an analyst for the Current Developments Team and a regular contributor to the Daily Brief. A student of transatlantic affairs, he specialises in political, economic and energy affairs of Europe and the Middle East.