French economy records 6% decline in Q1; worst dip in 75 years

Residents wear masks to protect themselves from the coronavirus as they visit the Eiffel Tower in Paris, France on March 26. File Photo by Eco Clement/UPI | License Photo

April 8 (UPI) -- The French economy declined 6 percent in the first quarter of 2020 caused by reaction to the coronavirus -- its greatest decline since the end of World War II, the Bank of France said Wednesday.

The contraction, brought on by a collapse in supply and demand in response to the pandemic, was France's largest since 1945. A lockdown began March 17 and is to remain in place until at least April 15, but the restrictions could be extended by the French government.

The Bank of France had projected a 0.1 percent growth in gross domestic product for the first quarter, following a 0.1 percent decline in the fourth quarter of 2019. Now, with two consecutive quarters of negative growth, France is technically in a recession.

The central bank said the strongest losses occurred in the trade, transportation, accommodation and restaurant sectors.

"Each fortnight [two-week period] of confinement is set to reduce the level of annual GDP by almost 1.5 percent," the Bank of France said in a statement. "It is indeed possible that the loss of GDP per fortnight may change as the cumulative duration of confinement lengthens."

Germany, Europe's greatest economic power, reported a 1.9 percent decline in its first quarter GDP. A joint forecast by five leading German think tanks project a near 10 percent contraction in the second-quarter, which would be the country's largest quarterly decline since record-keeping began in 1970.