The national economy contracted by 13.8% in the second quarter of 2020, after increasing by 0.1% in the previous quarter.
The national economy would have contracted by 13.8% in the second quarter of 2020, after an increase of 0.1% in the previous quarter, under the effect of a 14.4% drop in non-agricultural value added and a 6.1% decline in that of agriculture. In the third quarter of 2020, the drop in value added excluding agriculture should gradually diminish, with the recovery of trade, transport and manufacturing activities, standing at -4.1%. Taking into account a 5.9% drop in agricultural value added, economic activity would drop by 4.6%, instead of + 2.4% in the third quarter of 2019.
This economic outlook was drawn up on the basis of surveys carried out by the HCP and under-produced or collected information from other sources published up to the end of May 2020. It also takes into account the effects of a relaxation of the confinement from June 10, 2020 and a gradual restart of the various economic activities.
Reduction in domestic demand
Deteriorating the effects of the COVID-19 health crisis, domestic demand would have contributed negatively to growth in the second quarter of 2020. Household consumption, in volume terms, would have declined by 6.7%, in annual variation, instead of + 1.4% in the previous quarter. This drop would have particularly affected household spending on manufactured goods, notably clothing and equipment, as well as transport, catering and leisure. Spending on food would have kept its trend growth rate. Conversely, general government consumption would have strengthened by 6%, driven by the increase in operating and social services spending. As for investment, its development would have been noticeably tempered by the slowdown in investment in industrial products and the strengthening of sluggishness in real estate investment, in a context of stoppage of production units and strong destocking of businesses. In annual variation, the drop in investment would have reached -49.4% in the second quarter of 2020, instead of -4.8% a quarter earlier.
It should be noted that these forecasts remain subject to more or less significant revisions as new data are published, in a context marked by great uncertainties as to the duration of the state of health emergency and restrictions travel between cities, but also as to the magnitude of the impact of public spending programs and measures to support the national economy.
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