Tuesday , April 20 2021

France sticks to 6% GDP growth forecast

Bloomberg

France still sees gross domestic product growth of 6% this year, even after new lockdown measures came into force in Paris and other regions to contain the coronavirus.
“I confirm our ambitions to reach 6% growth in 2021,” Finance Minister Bruno Le Maire said in a radio interview on France Inter. “The moment when we lift the restrictions, our ability to rebound is
extraordinary.”
Parts of France were hit with a fresh bout of curbs, affecting about a third of the population. Essential businesses and schools will stay open, unlike under previous stricter lockdowns, with measures due to remain in place for four weeks.
France has been under a nightly curfew since mid-January, but the infection rate has climbed regardless and hospitals are increasingly under strain. Like other European countries, France has suffered a relatively slow rollout of vaccines, delaying the prospect of an economic recovery.
The government said that around 90,000 “non-essential” businesses will be closed, in addition to the large stores, cultural and sport venues that have been closed for months. Yet, booksellers, hair dressers, DIY stores, chocolatiers, flower shops and car dealers can remain open, fueling complaints from businesses that were not deemed “essential.”
Le Maire sought to justify the exemptions, saying that chocolate stores are dependent on the upcoming Easter season and that car sales were important to support French auto
factory workers.
The new restrictions have led to some confusion, with inter-city travel banned for the 20 million French under lockdown, though trips of up to 30 kilometers are allowed under some circumstances. The online form listing all the exemptions was not available Saturday morning.
Le Maire’s office estimates that the new curbs will knock 0.2 percentage points off off annual economic output. Support measures for closed businesses will cost an extra 1.2 billion euros ($1.4 billion) a month, bringing the total to 7.2 billion euros.
Le Maire also said that the state would provide a 20 million-euro loan on Monday to support GFG Alliance Ltd.-owned Liberty Steel sites in France to pay wages, suppliers and make sure activity can continue. Sanjeev Gupta’s GFG has been affected by the collapse of its biggest lender, Greensill Capital.

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