France: A grim end to a success story – Rabobank

In recent years, the French economy showed consistent economic growth helped by a growing world economy, and strong domestic demand. As is the case for virtually every economy in the world, the arrival of COVID-19 quickly turned things sour, per Rabobank.

Key quotes

“On April 30th, the preliminary quarterly GDP figures will be released. The consensus is that there will be a contraction of around 2%. For the year 2020 as a whole, we have revised our forecast from a growth of 1.1 percent to a contraction of 4.6 percent.”

“The French government is sparing no efforts to ensure that massive lay-offs are avoided through the adoption of the so-called Temporary unemployment scheme. As much as 700.00 companies and 10.2m employees have applied for the scheme. If these people were fired unemployment would rise to 43%.”

“We project a debt ratio of 111% for 2020. If costs for stimulus packages turn out to be higher than expected or if the lockdown is extended this figure could be significantly higher.”