France observed its sharpest economic contraction since World War II in the first quarter as a lockdown from mid-March deserted shops shuttered and consumers hunkered down at home, official data revealed on Thursday.
French gross domestic product contracted 5.8 per cent in the quarter from the preceding three months, the National Institute of Statistics and Economic Studies “INSEE” official statistics agency announced.
That recorded the second consecutive quarter the economy contracted, after shrinking 0.1 per cent in the fourth quarter of 2019, meaning it is technically in recession.
The first-quarter contraction was the highest on a quarterly basis since World War II, transcending the former record of minus 5.3 per cent in the second quarter of 1968 when France was gripped by civil unrest, mass student protests and general strikes.
The slump even passed most economists’ expectations, which on average were for minus 3.5 per cent, although estimates in Reuters poll went as low as minus 7 per cent.
INSEE said consumer spending, usually the driver of the French economy, dropped 6.1 per cent in the first quarter from the previous three months while business investment plunged 11.4 per cent.