The French economy, the second-largest in Europe, is expected to contract by 11 percent this year due to the impact of the coronavirus pandemic as the nearly two-month lockdown had paralyzed businesses and hit demand, Economy and Finance Minister Bruno Le Maire said on Tuesday.
The minister had previously estimated the French economy to shrink by 8 percent for 2020.
The minister said “the toughest is ahead” because “the shock of the crisis has been extremely violent in France” and economic activities were at a halt for nearly three months.
On March 16, French President Emmanuel Macron announced nationwide confinement for 15 days, starting at noon on March 17. This was extended twice and ended on May 11, when France cautiously started a gradual process to return to normalcy, easing some restrictions while maintaining others to avoid a new epidemic wave.
“The shock is very brutal. We must take all the measures to relaunch growth in 2021. I have the absolute conviction that the strategy we have adopted will allow us to rebound strongly in 2021,” he added.
Le Maire ruled out an increase in taxes to compensate for a surge in public spending to mitigate the economic fallout of the pandemic. He reiterated that the government’s plan to kickstart the economy was based on massive support to the hardest-hit sectors to avoid bankruptcies and modernize ways of production to bolster competitiveness and spur growth.
Since May 11, France has step by step returned to normality, allowing most businesses to go back to work after a nationwide lockdown.
On Tuesday, which marks the start of the second phase of de-confinement, 300,000 restaurants and cafes are allowed to receive customers, allowing 500,000 workers in the sector to resume their work.
The French government had also greenlighted museums, parks, beaches and religious sites to reopen, while theatres and swimming pools remained shut down in “orange” areas where the virus circulates faster than in low-risk regions.