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France: Economy rebounds from first COVID-19 lockdown just as second one begins

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A nurse is seen in a COVID-19 area of the Nouvel Hospital Civil of Strasbourg, Eastern France, Tuesday, Sept.15, 2020.
A nurse is seen in a COVID-19 area of the Nouvel Hospital Civil of Strasbourg, Eastern France, Tuesday, Sept.15, 2020.   -   Copyright  AP Photo/Jean-Francois Badias
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France's economy rebounded by a whopping 18.2 per cent in the third quarter compared to the previous three-month period but still not enough to reconcile with positive growth, official figures show.

According to the national statistics agency, INSEE, France's Gross Domestic Product (GDP) shrank by 4.3 per cent between July and September compared to the same period last year.

The latest figures come as the country enters its second national lockdown on Friday to slow a second wave of the COVID-19 pandemic. The lockdown is to last until at least December 1.

The first country-wide lockdown in the spring had ground the entire economy to halt and led GDP to contract by 5.9 per cent and 13.8 per cent in the first and second quarter respectively.

'We must protect the economy'

This time around, President Emmanuel Macron said in his televised address that "we must protect the economy".

"There is no such thing as a prosperous economy in a poor health situation with a virus actively circulating. And I'm telling you very clearly, no health care system can hold up if there is no strong economy to fund it.

"The economy must neither stop nor collapse. I therefore invite you, to the extent of each person's possibilities, to participate in this effort by working, by supporting companies which, near you, have innovated through remote orders, take out or home deliveries," he added.

As such, although hospitality businesses must once more close their doors to the public unless they can provide take away services, factories and building work will be allowed to continue. Crucially, schools will also remain open.

Economy Minister Bruno Le Maire warned on France Inter radio on Friday that "the fourth quarter will be difficult" as "the economy will not operate as usual" due to the new lockdown.

He also announced that the government will revise its annual growth forecast downward from a previous expectation of -10 per cent to -11 per cent.

"You can see that this is a moderate revision, precisely because we had a very strong third quarter which reflects a simple fact: the French economy's capacity to rebound is considerable," he said.

Other EU member states rebound too

France's rebound, although the most impressive in the EU, is not unique.

Spain and Italy grew 16.7 per cent and 16.1 per cent respectively quarter on quarter. Austria and Germany each expanded 13.2 per cent and by 8.2 per cent.

According to Eurostat's preliminary results, the bloc's GDP is therefore expected to have grown by 12.1 per cent in the third quarter compared to the previous one. But again, growth remains 3.9 per cent lower than at the same period last year.

But unlike its western neighbour, Germany still expects to return to positive growth in the fourth quarter with a projected GDP of 0.4 per cent. This is less than previously expected due to a recent surge in COVID-19 cases and a partial lockdown to come into force on November 2.

Economy Minister Peter Altmaier said the data was better than predicted and the government now expects a full-year decline in GDP of 5.5%, better than the government's forecast in September of a 5.8% drop.