The economic fallout from the spread of the deadly coronavirus around the world has been unprecedented. In this age of globalisation and economic interdependence, no economy is able to escape the consequences as demand dries up and supply chains break down.
France, the seventh largest economy in the world, has been the first global economic powerhouse to announce that they are now officially in recession. Whilst almost all major economies are likely to have contracted in the first quarter of 2020, France also experienced a negative growth rate of 0.1% in the last quarter of 2019.
With the French economy shrinking by approximately 6% in the last three months, these two consecutive quarters of negative economic growth mean that they are now technically in recession.
According to one estimate by the Bank of France, the French economy could shrink by 1.5% for every two weeks that the country remains in lockdown.
With coronavirus cases still increasing across France, the reopening of businesses seems a long way off, meaning that if the estimates are correct, this could be a very long and deep recession which may take years to recover from.
THINK LIKE AN ECONOMIST!
Q1. What is meant by the term recession?
Q2. Explain how economic growth is usually measured.
Q3. Discuss which businesses and individuals are likely to be worst affected by this recession in France.
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