France fell into recession in Q1, revised GDP data shows

  • 5/28/2021
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PARIS, May 28 (Reuters) - France, the euro zone’s second biggest economy, fell into recession in the first quarter of 2021 with a 0.1% contraction, revised official data showed on Friday. The INSEE statistics office revised its GDP reading sharply down from +0.4%, saying data from the construction sector had been much weaker than its extrapolation had suggested. It followed 1.5% contraction in the final three months of 2020. A revision of half a percentage point is highly unusual in France and underscores the challenges governments have faced in responding to the coronavirus pandemic as it roils economies around the globe. In a further sign of difficulties, household spending, the driving force of France’s economic activity, fell 8.3% in the first month of the second quarter after President Emmanuel Macron ordered a third national COVID-19 lockdown. That stay-at-home order is now being slowly unwound. Finance Minister Bruno Le Maire on Thursday stuck to his growth forecast of 5% for 2021 and said the crisis was “moving behind us, though we must remain cautious.” Full year 2020 GDP was slightly better than expected at -8.0% versus a previous estimate of -8.2%, INSEE said. The statistics agency also confirmed the public deficit stood at 9.2% of GDP last year. (Reporting by Richard Lough; editing by John Stonestreet) Our Standards: The Thomson Reuters Trust Principles.

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