France and Spain, Q1 GDP Plummets to -5% Range

France GDP down 5.8%... Worst since 1949
Spain also sees provisional GDP -5.2% due to COVID-19 impact

[Asia Economy Reporter Han Jinju] France and Spain recorded negative growth in the 5% range in the first quarter due to the impact of the novel coronavirus infection (COVID-19).

On the 30th (local time), the French National Institute of Statistics announced that the gross domestic product (GDP) decreased by 5.8% in the first quarter. This is the worst indicator since the French National Institute of Statistics began compiling GDP in 1949. France recorded negative growth for two consecutive quarters, following a -0.1% growth rate in the previous quarter (Q4 2019).

The sharp decline in the first quarter growth rate was due to business closures and restricted movement caused by the spread of COVID-19, which led to a contraction in economic activities and a sharp drop in consumption. Household consumption in France decreased by 7.3% in the first quarter. In March, when the lockdown was imposed due to the spread of COVID-19, it dropped by as much as 17.9%.

The French government forecasts an economic growth rate of -8% for this year. To prepare for the COVID-19 shock, it approved an emergency fiscal spending plan worth 110 billion euros (approximately 145 trillion KRW) and is providing state guarantees for corporate loans worth 300 billion euros (397 trillion KRW).

Bruno Le Maire, Minister of Economy and Finance, said, "We must be aware that after this shock is absorbed, there could be a wave of corporate bankruptcies and serious shocks to the labor market."

Spain's first-quarter GDP growth rate was preliminarily estimated at -5.2%. In the previous quarter, it grew by 0.4% due to strong exports, but the growth rate turned negative due to the spread of COVID-19. The Spanish National Statistics Institute stated that there were difficulties in collecting data necessary for GDP compilation due to the nationwide lockdown caused by COVID-19 and that the final figure could fall further than the preliminary estimate.

The Bank of Spain, Spain's central bank, projected in a report released on the 20th that this year's GDP will decrease by at least 6.6% and up to 13.6%.

This content was produced with the assistance of AI translation services.