France‘s second lockdown will push the economy back into a slump and slow the recovery in 2021, even though restrictions to contain the coronavirus aren’t as severe as earlier in the year. In a best-case scenario of restrictions ending Dec. 1 and a quick return to the levels of activity seen just before the second lockdown, output would still drop 2.5%, statistics agency Insee said Tuesday. If activity remains at November’s levels through December, the contraction could be as deep as 6%.
Separately, Finance Minister Bruno Le Maire cut the government’s growth forecast for 2021 to 6% from 8%. He noted there is also a risk from stricter social distancing rules hurting many sectors in the long term. The gloomier outlooks underscore how the resurgence of the pandemic is transforming the economic crisis from a sharp shock into a prolonged slump clouded by uncertainty. The hospitality sector faces particularly acute risks amid reports the government could keep bars shut until mid-January, far later than the initial goal to reopen on Dec. 1.
