French GDP Revision Shows Economy Contracted again in Q1

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PARIS, May 28 Reuters Frances economy contracted 0.1 in the first quarter of 2021, revised official data showed on Friday, marking a slip into recession as it struggled to recover from a pandemicinduced downturn.

The unusually sharp downwards revision from an initially reported expansion of 0.4 in JanuaryMarch reflected a poorer than expected performance in the construction sector. It marked a second consecutive quarter of contraction after the French economy shrank 1.5 in the final three months of 2020.

Fridays revised figure from the INSEE statistics office underscores the challenges governments have faced in responding to the coronavirus pandemic. French President Emmanuel Macron has spent tens of billions of euros to shore up activity and protect jobs as lockdowns to contain COVID19 have temporarily shuttered businesses, especially in the services sector.

France and its European neighbours faced a fresh wave of coronavirus infections this year, prompting governments to reimpose strict curbs to contain the spread.

In a further sign of difficulties, household spending, the driving force of Frances economic activity, fell 8.3 in April, at the start of the second quarter after President Emmanuel Macron ordered a third national COVID19 lockdown.

The real disposable income of households fell by 1.0 in the first quarter while the savings rate dipped to 21.8 from a revised 22.7 at the end of 2020.

COVID19 restrictions are now being unwound in France. Finance Minister…

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