France cuts economic growth forecast to 5% amid lockdown

PARIS: The French economy will expand by 5% in 2021, Economy Minister Bruno Le Maire said in a newspaper interview, as a third lockdown to tackle the coronavirus pandemic has prompted a downward revision in the previous government forecast for 6% growth.

The new forecast was prudent, Le Maire said in comments published on Sunday in Le Journal Du Dimanche (JDD).

“Our fundamentals are sound; we will be able to bounce back,” Le Maire said.

French schools and non-essential stores such as clothing chains will now be shut for four weeks, after COVID-19 cases surged in recent weeks, edging up the number of patients in intensive care units.

Bars and restaurants have already been closed for months, while tourist travel is at a standstill, although unlike when France entered its first national lockdown a year ago, construction work and manufacturing are among business areas still ticking over.

Like many countries in Europe, France has ploughed billions of euros into propping up struggling companies with state-backed loans, help with rents and partial unemployment schemes.

The latest restrictions will force some 150,000 businesses to temporarily close, and aid measures in April will cost 11 billion euros, the finance ministry has said.

Le Maire has repeatedly called for the European Union to accelerate the ratification and implementation of its 750 billion-euro economic stimulus plan.

He told the JDD that France was now unlikely to get the 5 billion euro disbursement from that scheme in July as planned, due to delays.

France has its own 100 billion-euro economic reboot programme, and plans to spend roughly half of that budget by the end of the year, Le Maire said.