A very uncertain first quarter
Given the November lockdown, GDP is expected to fall by 4 to 5% in the fourth quarter of 2020 compared to the third quarter. This is therefore another major shock, but much less than that observed in the second quarter of 2020 (-13.8%). Given the reopening of shops, the month of December should already mark a significant rebound in household consumption, which will give a good start to 2021. It should be noted that the situation here is fundamentally different in France than in other European countries such as Germany and the Netherlands. These countries did not experience any shop closures in November. On the other hand, shops in these countries were ordered to close around Christmas and will continue to do so in January. These countries are therefore likely to experience much better economic performance than France in the fourth quarter, but a worse performance in the first quarter.
French economic growth in the first quarter will, however, depend almost entirely on developments in the health situation. Indeed, the government has made it clear that the pandemic situation is fragile. The curfew is still in force everywhere from 8pm and even from 6pm in some areas. Although non-essential shops are open during the day, bars and restaurants will not be able to reopen until mid-February. The ski lifts in the ski resorts are also still closed and a new point will be made on the subject on 20 January (just before the very crucial February holiday period, which represents between 35% and 50% of the annual income of ski resorts).
We estimate that, if shops and schools remain open, GDP growth should be positive in the first quarter thanks to the rebound in household consumption. Net exports, on the other hand, are likely to weigh negatively on GDP, notably due to the strict lockdowns in force in other European countries. Brexit is also likely to have a negative impact as companies on both sides of the Channel made a lot of purchases to increase stocks in the fourth quarter as the deadline approached and fears of not getting a deal increased. These stocks will now have to fall before trade between France and the UK can resume. In the end, we expect growth of around 1.5% compared to the fourth quarter assuming that restrictions remain at their current level. A strengthening of restrictive measures, for example through the closure of shops or schools, would probably lead GDP growth to fall below 0% in the first quarter.
"consumption" - Google News
January 08, 2021 at 06:32PM
https://ift.tt/39awJMJ
France: November was bad for consumption but solid rebound expected - ING Think
"consumption" - Google News
https://ift.tt/2WkKCBC
https://ift.tt/2YCP29R
Bagikan Berita Ini
0 Response to "France: November was bad for consumption but solid rebound expected - ING Think"
Post a Comment