Bank of France Lowers French 1Q GDP Due to Coronavirus

The hit from the coronavirus epidemic on French businesses will slash two tenths of a percentage point from France’s economic growth in the first quarter, the Bank of France said Monday.

Gross domestic product will rise 0.1% in the first quarter of 2020 compared to the prior quarter, according to the central bank’s monthly survey of business activity. In the prior survey, the bank had projected 0.3% growth in the first quarter.

“Business leaders predict a decline in most sectors in March given the new context of the coronavirus epidemic,” the bank said.

The declining growth projections are another signal of the economic slowdown from the virus, infections of which have started to spike in France to more than 1,100 as of Sunday–second-highest in Europe behind Italy. Health officials have closed schools in two regions of France and many workers are being urged to stay home.

Stock markets in Europe plunged Monday as part of a global rout, in part on concerns about the effect of the new coronavirus on businesses. France’s CAC-40 was down more than 4% in early trading.

French Finance Minister Bruno Le Maire, speaking on French radio, said Monday that the impact on growth in 2020 would be “severe.”
Source: Dow Jones