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French economy to return to pre-crisis levels only in 2022

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France’s economy will take two years to recover from its worst post-war recession, triggered this year by the coronavirus outbreak, the central bank said on Tuesday.

The euro zone’s second-biggest economy is on course to contract 10.3% this year, before it bounces back with growth of 6.9% in 2021 and 3.9% in 2022, the Bank of France forecast.

Nearly a million jobs are likely to be shed this year and unemployment could climb to a new record of 11.8% in the first half of 2021.

The central bank said the outlook could be brighter if the virus is quickly brought under control, while a second wave of infections could plunge the economy into a 16% downturn this year followed by growth of only 6% in 2021 and 4% in 2022.

The forecasts did not take into account the potential impact of a recovery plan that the government aims to announce in the coming months.

President Emmanuel Macron put France under one of the most stringent lockdowns in Europe in mid-March, effectively shutting down large swathes of the economy until restrictions began to be lifted on May 11.

As of the end of May, economic activity was still running 17% below normal levels, though up from the 32% reduction seen during the first two weeks of lockdown in March, the central bank estimated. Business surveys suggested activity could get back to less than 12% of normal levels this month, it added.

Nonetheless, the time spent under lockdown meant that the economy probably contracted 15% in the second quarter from the previous three months, when it had already slumped 5.3%, the Bank of France estimated.

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