French economy shrank less than first thought in first quarter: INSEE

(C) Reuters. Restaurants and bars owners prepare to reopen in Nice

PARIS (Reuters) – France’s economy contracted less than initially thought in the first quarter, although it remained mired deep in recession due to a coronavirus lockdown, data from the INSEE official stats agency showed on Friday.

The euro zone’s second biggest-economy contracted 5.3% in the first three months of the year from the previous quarter, INSEE said, revising its initial estimate of a 5.8% fall.

Nonetheless, it was France’s deepest quarterly slump since 1968, when France was gripped by civil unrest, mass student protests and general strikes.

After the economy shrank 0.1% in the fourth quarter, France entered a technical recession, defined as two consecutive quarters of contraction.

The government put France under one of the most strict lockdowns in Europe from mid-March, shutting down vast swaths of the economy until restrictions began to be lifted on May 11.

Although economic activity is gradually coming back on line, INSEE estimated earlier this week that the economy may contract 20% in the second quarter.

The lockdown depressed household spending, traditionally the motor of French growth. INSEE said on Friday that consumer spending had plunged a record 20.2% in April from March, when it had already slumped 16.9%.