France's economy slumps below expectation in Q4
- 29 Jan 2021
Gulf Today Report
The French economy lurched back into contraction in the final quarter of last year but it is below expectations after a second lockdown.
The second-biggest economy in the eurozone shrank 1.3% in the last three months of 2020 after it recorded gains of 18.5% in the previous quarter, mentioned INSEE statistics agency.
This means that in 2020, the economy contracted 8.3% beyond the -11% the government forecasted.
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That is encouraging news for the public finances as the public sector budget deficit is, therefore, likely to come in at less than the 11.3% of gross domestic product the government had expected.
INSEE added that consumer spending soared by 23% in December after lockdown restrictions were eased.
Meanwhile, exports surpassed imports so that foreign trade contributed 0.9 percentage points to fourth-quarter GDP while inventory building added 0.4 percentage points.