Looks like the French economy after the containment

Without surprise, at the end of two months of confinement, the economic indicators are in the red. According to data published this Friday by the Insee, household consumption collapsed in April and the gross domestic product (GDP) recorded in the first quarter, a fall comparable to that recorded during the second quarter of 1968, marked by massive strikes in the month of may.

• household consumption collapsed in April

In April, the French were confined during the entire month because of the outbreak of coronavirus, while the containment was not in place during the second half of the month of march. Result : the consumption of households has melted to one-third (33.7 per cent) compared to the month of February, and 20.2% compared to march. Compared to April 2019, the consumption of households has also dropped by more than a third (34.1%) in the last month.

In detail, it is the consumption of manufactured goods, which fall most heavily, of 42.6% between march and April, after which 42.1 per cent between February and march. Compared to April 2019, this consumption has collapsed by two-thirds (66,6%) in the last month. Households confined have benefited from the drop in oil prices and their every movement to reduce their energy expenses : they decreased by 22.8% in a month and 33.2% from a year earlier.

food consumption, which had jumped 9.2% on a month-march, when the French have stored basic food products at the beginning of the confinement, declined 5.4% in April. On a year, however, it is continuing to sign up last month, by 2.3%.

• The inflation cup in may

The rise of consumer prices slowed to 0.2% year on year in the month of may, according to provisional data collected by the national statistics Institute. This fall is linked to the "decline accentuated in energy prices and manufactured products", explains Insee. It is also a result "a downturn in the price of power", while consumer prices remain stable on a month.

• The GDP declined by 5.3% in the first quarter of

The gross domestic product (GDP) fell from -5,3% in the first quarter, according to Insee, which had been anticipated in a previous estimate for a decline of 5.8%. This indicator confirms, unsurprisingly, the entry of France into recession in the first quarter, following declines of 0.1% of the activity of the last quarter of 2019. Such a fall had been recorded during the second quarter of 1968, marked by massive strikes in the month of may.

In detail, the consumption expenditure of households recorded a "low new" - 5.6%, related to the closures of many shops. Same thing on the side of the companies, with an investment that plunges -10,5%. This domestic demand in berne helps to reduce 6 points of the GDP during the first quarter.

Without surprise, the disposable income of households declined slightly (-0,1%) in the first quarter. If the wages received have gone down with the use of the device for partial unemployment, this has been "offset by a strong acceleration of social benefits in cash", explains Insee. However, the massive intervention of the State has helped limit the loss of purchasing power, at-0.4%, still notes the Insee. Households have also encouraged savings in the first quarter, with a savings rate climbed to 19.6%, compared to 15.1% in the last quarter of 2019.

Consequence of this decline in activity and the measures taken to support the enterprises and employees, the public deficit has deteriorated "sharply" in the first quarter. The need for government financing increases by 1.1 percentage points to 4.8% of GDP, against 3.7% in the last quarter of 2019.

The editorial team conseilleCovid-19 : how France redémarreSujetInseeAucun comment

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