The GDP could drop to around 20% in the second quarter, according to Insee

Since the beginning of the déconfinement the activity is started again "cautiously but decisively" in France, but the gross domestic product (GDP) should still decline "about 20%" in the second quarter, and by more than 8% on the year as a whole in an optimistic scenario, said Wednesday the Insee.

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The French economy would be currently "at about four-fifths of its pre-crisis level", against two-thirds for the containment, states the national Institute of statistics in a new point of economic activity.

"The economic activity in June could be on the order of 14% less than normal (after -25% in average in may and -35% on average in April)," according to the Insee, portending a fall in GDP of around 20% on the second quarter, following declines of 5.8% registered in the first.

It would be "the most significant recession since the creation of the national accounts in 1948," says the institute, which underlines that this forecast should be taken "with caution", given the uncertainty of the pace of recovery in the coming weeks.

A return to normal will likely take "many months", and even if the activity returned to its pre-crisis level as early as July, the French GDP is expected to decline by 8% over the year 2020. This figure corresponds to the level of recession that the government's plans for this year.

"Gold as swift a return to normal seems to be unrealistic. The overall impact of the health crisis into 2020, will be certainly higher than this figure," said the Insee.

"After nearly two months of slow, like snorkeling, the French economy strives to regain his breath. But it resurfaced in a world that is no longer exactly the same as before the health crisis," added the institute.

Since 11 may, the déconfinement has allowed a resumption of activity in all sectors. In the business sectors, the most affected by the confinement, the loss of activity is -25% versus -39% before the déconfinement.

It is -38% in construction (compared to -75% before 11 may), and -24% in industry (compared with -38%).

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above all, with the reopening of many shops, household consumption has experienced a "rebound" during the first week of the déconfinement, with only one level less than 6% to its pre-crisis level (compared to -32% in early may), even if a party is only partial, the fact purchases, deferred, highlights the Insee.

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