Business INSEE confirms its particularly grim forecast for the French...

INSEE confirms its particularly grim forecast for the French economy

INSEE persists and signs. In a new point of conjuncture published this Thursday, the national statisticians come back on their quantification of the consequences of the confinement, fifteen days after a first report on the subject. The institution returns to three main points – activity, household consumption and an international comparison – and confirms its first warnings: economically, the coronavirus will represent a “totally new shock“, The scale of which will be”much more important“Than the financial crisis of 2008-2009.

INSEE does not publish a new estimate of the assessment of quarterly or annual GDP, and indicates that its latest conclusions, “-12% on quarterly GDP and -3% on annual GDPShould be re-evaluated. Overall, the horizon looks bleak: INSEE plans to develop “markedly negative in the first quarter“, And”probably more in the second quarter” It will all depend on how the deconfinement is organized: “the longer the period of confinement, the longer it will take for value chains in certain sectors to reorganize, the longer the activities in certain business services will be penalized“Warn the study authors. Overview of the main lessons.

Economic activity: a third of the French economy put to sleep

First, INSEE confirms its first estimates of the loss of activity caused by confinement. Two weeks ago, its experts reported that “Compared to a so-called” normal “week, the loss of” instant “activity is estimated at around a third”. A considerable shock to the economy, which leaves “65%»Of the activity turn normally. INSEE now assesses the loss of activity at “more than a third of GDP“, Or 36%.

However, this estimate varies widely across sectors. The loss of activity rose to -42% in the mainly commercial branches of the economy, which represent three quarters of French GDP. But if some services, such as accommodation and catering, are almost at a standstill, others, like the food industry, maintain a level “relatively close to normal” In addition, shops, transport services and accommodation and catering contribute “alone a third of the loss of activity

Comparison of the loss of activity compared to a normal situation in April, by sector Insee, Le Figaro

For comparison, the UK Center for Economic and Business Research estimates the loss of daily activity in the UK at 31%. The Italian INSEE counterpart for its part reports a “decline in economic activity to a minimum of 41% compared to a normal situation” In China, on the contrary, after a long period of hibernation, activity is gradually resuming: according to feedback from the General Directorate of the Treasury on the spot, the rate of resumption of activity in the main regions and cities of the Middle Empire went from 40% in early March to 70% twenty days later.

See also – Emmanuel Macron does it really go up in the polls?

Consumption: households tighten their belts

In France, confined households logically spend less: INSEE reports a drop in consumer spending by more than a third (-35%) compared to a normal period. “After massive purchases linked to anticipatory behavior, household spending is down sharply from normal“, Underlines the institution. Here again, this fall is seen differently depending on the sector: fuel purchases have collapsed, after a pre-containment peak, sales of motor vehicles are at the bottom of the abyss, as are those of manufactured goods including clothing. Accommodation, leisure and catering are also left out, as are several services, such as private training or health care in the city. Interruption of work forces household consumption “in the construction industryIs also at the lowest.

Comparison of consumption loss compared to a normal period, in April, in% Insee, Le Figaro

Conversely, other expenses are more resilient: this is particularly the case for those related to energy, telecommunications, or agrifood products, up from normal (+ 10%). Overall, the sectors “essentials“Like food, is doing better, with a sharp increase at the start of containment on March 16. Fuels also experienced a meteoric rise, when households bought their supplies in advance. Since then, this expenditure item has collapsed.

INSEE, which has examined household credit card transactions, also highlights some changes in consumer behavior. Logically, physical sales collapsed, experiencing a decline “-60% on average“After containment, when distance sales are more resilient, with a decline limited to”-20%Only. The organization also notes that households buy less often, but spend more at once: in food, since the start of containment, the number of transactions is lower “to that of last yearOn the same dates (-27% the week of March 23, for example), but the average basket is growing strongly, by around 48%. An observation that confirms the feedback from the Federation of Commerce and Distribution.

Jobs: bleak prospects

If the effects of the current crisis on employment are impossible to measure precisely for the moment, INSEE recalls that more than a third of private sector workers were affected by partial unemployment on April 7, or 6.3 million people (6.9 million Thursday 9, announced Muriel Pénicaud). Never seen before, and the balance sheet should continue to rise in the short term, as companies file their applications.

However, for the time being, the French seem less concerned about unemployment than their neighbors. Studying the giant Google’s database, INSEE underlines that if searches linked to the word “unemployment“Jumped across the board, they”faster back into France“Than elsewhere. The job balance could be catastrophic in several countries, warns the report: according to several economists in the United States, “up to 40% of jobs, especially in services, are at risk from the coronavirus crisis” In two weeks, almost 10 million people have registered as unemployed, a trend that should continue.

International: confinement differently felt according to nations

France is not the only country to have put a good part of its activity to sleep. The consequences of confinement are visible around the world, notes the institution. Several indicators provided by different companies can thus make it possible to compare the consequences of this exceptional episode in several countries. Overall, road traffic in the main cities of the world has dropped from 30% to 60%, notes TomTom, when Citymapper indicates areduced mobility80% in most major cities. The number of commercial flights around the world was also cut in three, when electricity consumption fell by 10% to 30% depending on the nation. In France, RTE places the decline in a range between 15% and 20%, mainly driven by an industrial fall. Conversely, residential consumption “tends to increase

.

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