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France officially in recession as economy plunges 5.8% but optimism rises as lockdown set to ease

© Margerretta

France faced its steepest contraction in economic activity since 1949, with GDP down 5.8% in the first quarter.

The numbers are a grim reminder of how quickly the economic situation has deteriorated in the 2020 with COVID-19 and a nationwide lockdown.

This follows a 1% contraction in Q4 of 2019, sending France into a recession. It was estimated that the economy would shrink by 8% this year, an unprecedented contraction not seen since just after WW2.

While the numbers are exceptional, there is rising optimism that the fall in GDP will rebound sharply as people go back to work and restrictions are eased.

Never before has France had to shut down its economy in a way that it has, and most G20 nations are also expected to shrink in line with the French numbers.

The question remains, how will the European Union come together to address the economic problems of many eurozone members that are tied to the common currency?