France expects 8% drop in GDP due to COVID-19 crisis: Finance Minister

After French President Emmanual Macron announced a one-month extension of the ongoing COVID-19 lockdown, the Finance Minister said the economy is expected to witness a decline of 8 per cent this year. Speaking to BFM television, Bruno Le Maire said that the revised forecast would be included in the new 2020 budget programme.

Le Maire said that the government wants to expand the access of secured loans to troubled businesses after banks granted €10 billion loans on State guarantee. The French Finance Minister further added that 900,000 companies have already benefited from the Solidarity Fund and 2nd level of aid will be increased from €2000 to €5000.

Read: COVID-19: France Extends Lockdown Till May 11 As Cases Spike

Deepest recession since WWII

Earlier on April 6, Le Maire warned a Senate panel that France is likely to see its deepest recession since World War II due to the coronavirus pandemic. Le Maire said that France witnessed the worst recession since WWII after the global financial crisis of 2008 when the country’s growth slumped to -2.2 per cent.

Le Maire told the panel that France will probably witness a growth rate way beyond -2.2 per cent, indicating the amplitude of economic shock due to the pandemic. France announced a nationwide stay-at-home order on March 17 in order to contain the coronavirus but the outbreak has spiralled out since then with nearly 136,779 cases and 14,967 deaths in the country.

Read: Italy, France Report Fall In Daily Coronavirus Deaths Offering A Glimmer Of Hope

Last month, French national statistics bureau INSEE had predicted an annual cut of three percentage points in the GPD with every month of lockdown. It announced that the lockdown has already slashed the economic activity by 35 per cent which is worsening with every passing day.

In order to support the economy, the government has given companies the option of deferring their social security contributions and direct taxes by adjusting their payment. The deadline of March 20 for 460,000 self-employed workers was automatically postponed for a month and the April 20 deadline has again been postponed.

Read: COVID-19: France Extends Lockdown Till May 11 As Cases Spike

Read: Experts Under WHO’s Coordination Working Towards Development Of COVID-19 Vaccine

(Image credit: Twitter / @BrunoLeMaire)