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French economy in recovery as first signs of growth emerge

© Shirota Yuri

France is finally seeing some growth after months of turmoil and its worst economic contraction since the founding of the 5th Republic.

As the second largest economy in the European Union, French GDP matters for a European recovery, and the latest data shows a significant leap in activity from May to June.

The Purchasing Managers’ Index registered an increase from 32.1 recorded in May to 51.5 in June, signifying a solid rebound and an expansion of economic activity.

With France returning to normal, economic conditions have been improving over the past several weeks as restaurants, cafes and shops open, and the business sector at large gets back to work.

France has been one of the hardest hit countries in the European Union by the coronavirus pandemic, and initiated a strict lockdown for several weeks in order to combat rising infections.

The latest news is good for French President Emmanuel Macron who has been seeking signs of positive economic indicators following record stimulus, mounting government debt and a spending bill exceeding €300 billion euros to support the country’s economic recovery.

However, France’s important tourism sector faces more hurdles as international travellers from countries including the UK and the United States have yet to return due to ongoing travel restrictions and limited air capacity.

Broadly, economic activity has been picking up across the Eurozone for several weeks, and as further economic output continues, this should have a positive knock-on effect on struggling businesses that have seen a slump in consumer demand.

Is this the rebound France has been looking for?