French economic activity reduced by 36%, INSEE says

(C) Reuters. FILE PHOTO: Lockdown imposed to slow the spreading of the coronavirus disease (COVID-19) in Paris

PARIS (Reuters) – A nationwide lockdown in France has reduced economic activity by 36%, the INSEE official statistics agency said on Thursday, confirming an initial estimate last month.

In an updated analysis of the economic impact of the coronavirus outbreak, INSEE also stuck with an estimate that each month of lockdown would cut economic growth by three percentage points.

It also warned that it would take time for activity to recover once the government lifted the lockdown. It took effect on March 17 and the government has said it will be extended April 15, a move that was widely expected.

INSEE said it would publish “if possible” an initial estimate of first-quarter gross domestic product at the end of April.

“GDP will be sharply negative in the first quarter and without doubt even more in the second quarter depending on how long and how the end of confinement takes place,” INSEE said.

The French central bank estimated on Wednesday that the euro zone’s second-biggest economy contracted an unprecedented 6% in the first quarter from the previous three months.