Economy
French economy still on track for 5% growth this year: central bank – TheChronicleHerald.ca
PARIS (Reuters) – The French economy is still on course to rebound 5% this year despite the uncertainty created by the coronavirus pandemic, the head of the central bank said on Tuesday, reiterating its December forecast.
The euro zone’s second-biggest economy suffered its deepest post-war recession last year, with gross domestic product contracting 8.3% due to the coronavirus outbreak and measures to contain it, including two national lockdowns.
“I can confirm our forecast for 5% growth for the whole of 2021. It’s robust and rather cautious while reflecting of course the great uncertainty around the health situation,” Bank of France Governor Francois Villeroy de Galhau said in an interview with the Ebra regional newspapers group.
Finance Minister Bruno Le Maire has built the 2021 budget on a forecast for 6% growth this year, although he has in recent weeks indicated that that might be a stretch.
The central bank estimated on Tuesday that the economy was likely operating this month down 5% from pre-crisis levels, unchanged from the previous two months.
Companies consulted by the central bank in its monthly business climate survey reported stable expectations for business activity despite high uncertainty over the health outlook, the Bank of France said in a monthly report.
The French government has for now held off on imposing a new, third national coronavirus lockdown although it has also not ruled such action out if the outbreak risks spiralling further out of control.
Last month the government tightened restrictions by moving an 8:00 pm curfew to 6:00 pm and required large shopping centres to close as well as the hospitality and entertainment sectors, which have already been largely closed for months.
Reflecting such restrictions, the central bank’s survey showed that the service sector continued to be harder hit than the industry, where production capacity reached 74% in January compared with a pre-crisis average of 79%.
(Reporting by Leigh Thomas; Editing by Hugh Lawson)
NEW DELHI — India’s economy expanded by a weaker-than-expected 0.4% in the October-December quarter, which still allowed it to escape recession following large contractions in the two previous quarters during the coronavirus pandemic, the government said Friday.
The National Statistical Office projected an 8% contraction for the 2020-21 financial year, which ends in March. In January, it had projected a contraction of 7.7% for the fiscal year, following 4% growth in 2019-20.
It said fertilizer production rose by 2.7% in January, steel by 2.6% and electricity generation by 5.1%. Coal production declined by 1.8%, crude oil by 4.8% and natural gas by 2%, it said in a statement.
India’s economy contracted by 7.5% in the July-September quarter following a record plunge of 23.9% in the previous three months. The government had imposed a strict two-month lockdown across the country in March after the outbreak of the pandemic.
A country enters a technical recession if its economy contracts in two successive quarters. India’s recovery is expected to improve with a rise in consumer demand and investment.
India’s central bank, the Reserve Bank of India, is projecting gross domestic product growth of 10.5% in financial year 2021-22. The International Monetary Fund has projected 11.5% growth in calendar 2021.
The IMF estimated that the Indian economy contracted 8% in 2020.
The Associated Press
Several big states, including California, have eased restrictions in recent weeks.
Photo: lucy nicholson/Reuters
The French economy’s contraction in the fourth quarter of 2020 was slightly more pronounced than previously estimated, data from the country’s statistics agency Insee showed Friday.
In the October-December period, gross domestic product shrank 1.4% from the previous quarter–0.1 percentage point more than the preliminary estimate of a 1.3% contraction released on Jan. 29.
GDP in the quarter contracted 4.9% from a year earlier, the data showed. The decline was 0.1 percentage point less than the 5% drop previously estimated.
The French economy–the eurozone’s second largest–is expected to contract again in the first quarter of 2021, as extended government restrictions to contain the coronavirus hinder economic activity.
Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com
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