{"id":105797,"date":"2021-01-29T09:16:39","date_gmt":"2021-01-29T09:16:39","guid":{"rendered":"https:\/\/fin2me.com\/?p=105797"},"modified":"2021-01-29T09:16:39","modified_gmt":"2021-01-29T09:16:39","slug":"france-economy-slumps-less-than-expected-in-fourth-quarter-despite-lockdown","status":"publish","type":"post","link":"https:\/\/fin2me.com\/markets\/france-economy-slumps-less-than-expected-in-fourth-quarter-despite-lockdown\/","title":{"rendered":"France economy slumps less than expected in fourth quarter despite lockdown"},"content":{"rendered":"
PARIS (Reuters) – The French economy contracted much less than expected at the end of last year, official data released on Friday showed, as the growing prospect of a new lockdown wipes out hopes for a recovery early this year.<\/p> The euro zone\u2019s second-biggest economy shrank 1.3% in the final three months of last year after France entered a second coronavirus lockdown in October to contain a second wave of infections, the INSEE statistics agency said.<\/p>\n The slump, which followed an 18.5% rebound in the third quarter after a first lockdown, exceeded expectations for a 4% contraction on average in a Reuters poll of 28 economists, surpassing even the highest estimate of -1.4%.<\/p>\n It also meant that for the whole of 2020, the economy contracted 8.3%, which though France\u2019s worst post-war recession was better than the -11% the government had forecast in its budget plans.<\/p>\n It also eases some of the strain on the public finances as the budget deficit is, therefore, likely to come in at less than the 11.3% of gross domestic product the government had expected.<\/p>\n France is on tenterhooks to find out in the coming days whether the government will put the country under a new lockdown and in particular whether schools will be closed.<\/p>\n \u201cIf the restrictions are made harder, it will be very difficult to get any growth\u201d in the first quarter, Euler Hermes France economist Selin Ozyurt.<\/p>\n INSEE said consumer spending surged 23% in December from the previous month as coronavirus restrictions were eased heading into the holiday period, which helped to limit the overall fourth-quarter drop in household spending – the traditional motor of the French economy.<\/p>\n Meanwhile, exports surpassed imports so that foreign trade contributed 0.9 percentage points to fourth quarter GDP while inventory building added 0.4 percentage points.<\/p>\n INSEE said that exports of transport goods and pharmaceuticals had held up well in the period while lower economic activity had limited imports of oil.<\/p>\n