Covid-19: with the new lockdown, the Bank of France says GDP to drop by 12% in November

Published by Alexandre G. · Published on 12 November 2020 at 18h30 · Updated on 12 November 2020 at 21h07
France’s GDP is to soon experience a 12% drop in November 2020, mainly because of the new lockdown measures, implemented since Friday October 30, 2020. The Bank of France is forestalling a drop by 9% to 10% in 2020.

The Bank of France is sharing forecasts as for the state of the country’s economic activity. And this is no good news: just in November 2020, the new lockdown is to lead to a 12% drop of the French GDP, in comparison with a so-called “normal” activity. These bad results can be explained with the brutal stop of work in sectors such as food services and non-food retail, and even leisure activities.

Furthermore, the banking institution announces pretty gloomy estimations via governor François Villeroy, invited this Monday November 9 on RTL. Even more serious, the civil servant lowers once again the estimations as for the drop of the GDP in 2020. As a matter of fact, after unveiling in September the drop was estimated by circa 8.7%, the French GDP is now said to drop by 9% to 10% for 2020. “The loss of GDP for a typical week’s activity would be -12% in November, against -4% in October, but -31% in April” he said.

Furthermore, according to data from the Bank of France, the good news is that the drop in activity forecasted for the new lockdown is expected to be lighter than when it was first implemented in April 2020. Of course, this almost-improvement originates from the “partial” sustainment of the economy with measures implemented such as financial support, or the continuity of many sectors.

Yet, the lockdown does not do good to the country’s economy, far from that. Logically-speaking, the banking institution warns professionals impacted by the crisis and the return of the restrictions: some sectors are said to struggle the same way than during the first lockdown. In the traditional food services, and activities considered as “recreational”, the Bank of France thinks with the current context, “perspectives are highly degrading”.

Yet, other branches have been spared by the new lockdown so far. And some of them even enjoys a new lease of life. This is the case of the industry which activity has been “overall stable” in October. Same call for the building and public works industry with a return “close to normal” since this summer. Good signs but not enough to get it back on an even keel, or even the recession level set at 11% by the government. As long as there is no vaccine or herd immunity developed, the economic indicators will keep on struggling with the crisis pace set up by the Covid-19 epidemic.

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