French economy projected to shrink by 9-10 percent in 2020

France's central bank said on Monday it expects economic activity to decline between 9 and 10 percent this year, a bigger drop than previously forecast due to a new lockdown.

French economy projected to shrink by 9-10 percent in 2020
The second lockdown has lead economists to revise their forecast. Photo: AFP

While the new confinement measures will deepen the recession, the Banque de France believes that they will be far less destructive than during the country's first lockdown earlier this year.

“Before the second wave, we thought the recession would be a little less than 9 percent, we think today that for 2020 as a whole it will be between 9 and 10 percent,” Banque de France chief Francois Villeroy de Galhau said on RTL.

The central bank had forecast in September that economic activity, or GDP, would decline by 8.7 percent this year.

But that was before the rapid rise in Covid-19 cases in France in October, which led the government to impose a second lockdown.

The bank estimated that the new lockdown will cost the nation's economy 12 percent of GDP compared to a normal week in November.

The Banque de France said economic activity was running 4 percent below pre-pandemic levels before the new lockdown was imposed at the end of October.

Restaurants, non-food retail and recreation activities are being hit the worst by the new restrictions which shut or tightly restricted their activities.

But the lockdown is somewhat less restrictive than the first with more businesses allowed to operate, and the 12 percent drop in November activity pales in comparison with 31 percent registered in April.

Businesses that are closed are permitted to operate 'click and collect', takeaway and online ordering this time around and the French government has said that online sales will not be taken into account when calculating how much financial aid a business is entitled to.

READ ALSO How you can support your local traders during France's second lockdown

“We've learnt together how to work while protecting workers,” said Villeroy de Galhau.

He noted that construction activity is continuing and public services remain open during this lockdown, while more companies have figured out how to continue operations using remote working.

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France scraps compulsory self-isolation after positive Covid test

France's public health body has outlined how Covid-19 rules will change on February 1st, including an end to compulsory self-isolation after a positive test result.

France scraps compulsory self-isolation after positive Covid test

Starting on February 1st, Covid rules will relax in France as the country ends compulsory isolation for those who test positive for the virus.

However, those travelling from China to France will still be required to agree to a random screening upon arrival and to isolate in the case of a positive Covid-19 test result. Travellers aged 11 and over coming from China must also provide a negative test result (less tan 48 hours) prior to boarding and those aged six and over must agree to wear a mask on board flights. These regulations – which was set to last until January 31st – is set to remain in place until February 15th.

The French public health body (The Direction générale de la santé or DGS)  announced the change on Saturday in a decree published in the “Journal Officiel” outlining the various ways the body will loosen previous coronavirus restrictions.

READ MORE: What Covid rules and recommendations remain for visiting France?

Those who were in contact with someone who tested positive – ie a contact cases – will also no longer be required to take a test, though the public health body stressed that both testing after contact and isolating after receiving a positive test remain recommended.

Previously, even asymptomatic people who had been in contact with someone who tested positive for Covid-19 were required to test on the second day after being notified that they were a “contact-case”.

These changes will take effect on February 1st.

READ MORE: What changes in France in February 2023?

The DGS also said that website SI-DEP, which records test results, will remain in operation until June 30th, however starting in February it will only collect personal data with the express permission of the patient.

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Additionally, the French government announced that sick leave procedures for people with Covid-19 will return to normal on February 1st – this means that those who test positive for Covid-19 will have the three-day wait period before daily sick benefits are required to be paid, as is usually the case. Previously, people with Covid-19 could expect daily sick benefits to begin at the start of their sick leave period (arrêt maladie in French).  

READ MORE: How sick leave pay in France compares to other countries in Europe

Covid tests are still available on walk-in basis from most pharmacies are are free to people who are fully vaccinated and registered in the French health system. Unvaccinated people, or visitors to France, have to pay up to a maximum of €22 for an antigen test of €49 for a PCR test. 

If you recently tested positive for Covid-19 in France – or you suspect you may have contracted Covid-19 – you can find some information for how to proceed here.

In explaining the changes that will begin in February, the French public health body also noted a drop in Covid-19 infections in the past month. As of January 30th, approximately 3,800 people in France had tested positive in the previous 24 hours for the coronavirus – which represents a decrease from the averages of 20,000 new cases per day about one month ago.