French economic downturn easing as lockdown lifts: central bank

PARIS (Reuters) – France’s economic downturn is easing as the country emerges from a lockdown imposed in mid March, although activity remains mired at levels far below normal, the central bank said on Tuesday.

The euro zone’s second-biggest economy was operating 27% below normal levels in April after 32% in the second half of March, the Bank of France said, basing its estimates on responses from its monthly business climate survey.

“The ambition we could have for the end of May is to recover another 10 points,” Bank of France Governor Francois Villeroy de Galhau said on France Inter radio.

France began unwinding its strict lockdown on Monday, allowing non-essential shops, factories and other businesses to reopen for the first time in eight weeks.

The central bank said manufacturing activity remained down 37% last month, but was nonetheless better than the 48% seen in March, while private sector service firms’ activity was reduced by 27% in April after 37% in March.

The Bank of France did not venture to make a quarterly GDP forecast it usually does when it publishes its business climate survey given the unprecedented nature of the current downturn.

However, Villeroy said that the two months of lockdown cost the economy 6% in lost activity this year so far, although the final bill would probably be higher as the recovery would be uneven.