Nevertheless, the French Economy Shrinks in the First Quarter

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France’s economy contracted in the first quarter of 2021. An earlier estimate reported a growth of 0.4 percent.

 

Still, according to a new calculation by the French statistics agency Insee, this is a shrinkage of 0.1 percent compared to the previous three months.

The construction sector, in particular, underperformed previously, according to the recalculation. The contraction in the first quarter followed a 1.5 percent decline in the last three months of 2020.

A 0.5 percentage point revision is highly unusual in France. It also underscores the challenges governments are facing during the corona crisis.

In April, the first month of the second quarter, households spent significantly less in France. That happened after President Emmanuel Macron announced stricter corona measures. At the moment, relaxations are already being implemented.

French Finance Minister Bruno Le Maire still held on to his 5 percent growth forecast for the entire year on Thursday. The statistics office further confirmed that the country’s government deficit was 9.2 percent of its gross domestic product last year.

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