ZCZC
BCN-09
VIRUS-FRANCE-ECONOMY
French April consumer spending plunges 34% vs February: Insee
PARIS, May 29, 2020 (BSS/AFP) – Consumer spending in France dropped 33.7
percent in April compared with February, before the country went into lockdown
to halt the coronavirus outbreak, statistics agency Insee reported Friday.
The government ordered businesses shut and residents to stay home on March
17, sending the economy into a tailspin that experts say could persist for
months.
Compared with March, consumer spending was down 20.2 percent.
In the first three months of the year, GPD shrank 5.3 percent, Insee said
Friday, less than its initial estimate of a 5.8 percent decline.
But the agency warned this week that GDP would probably contract 20 percent
in the second quarter under the full effect of the lockdown, which the
government began easing only this month.
Consumer spending in April was also down by more than a third — 34.1
percent — from the same month last year.
The recession has also pulled down inflation, which slowed to just 0.2
percent in May from a year earlier, reflecting lower energy prices as well as
falling costs for food and manufactured goods such as steel, machinery and
textiles, Insee said.
More than half of France’s private-sector workers found themselves without
jobs after the lockdown was imposed, though the government has continued to
pay the bulk of their salaries to avoid a surge in layoffs that could prove
permanent for many.
It has announced 110 billion euros ($120 billion) in financial aid and
other relief for businesses, although Finance Minister Bruno Le Maire has
nonetheless warned of a “cascade” of company failures.
The government has forecast an eight percent GDP slump for the full year,
but Insee said this week that the decline would likely be worse.
“Households are displaying a marked pessimism concerning France’s economic
situation,” Insee said on Wednesday.
BSS/AFP/MMA/1620HRS