(Bloomberg) — France‘s economic outlook is deteriorating as restrictions in a second nationwide lockdown hurt activity and a surge in Covid-19 cases raises the possibility of an intensification of the crisis.
The coming days will be crucial in determining whether President Emmanuel Macron‘s measures are sufficient to stem the spread of the virus and relieve pressure on hospitals. So far, there is little sign of respite with record numbers of new cases in recent days and intensive care units nearing capacity due to severely ill patients.
The government is already preparing to cut its forecast for a 8% rebound in economic output next year, Finance Minister Bruno Le Maire said in an interview with Sunday paper Journal Du Dimanche. The severity of the revision to the outlook may depend on whether authorities decide to loosen or tighten restrictions that they are due to review Thursday.
“We are mobilizing now to keep the lockdown to the shortest possible period,” government spokesman Gabriel Attal said on Europe 1 radio. “Clearly, we don’t want a video-conference Christmas.”
France is emerging as the epicenter of Europe’s latest Covid-19 outbreak. On Saturday, health authorities said the country has crossed the threshold of 40,000 deaths and added almost 87,000 new cases as they accounted for several days of under-reporting. Patients sick with the virus filled 87.2% of intensive-care capacity, an increase from 85.4% on Friday
“The second wave has arrived here brutally, violently,” Prime Minister Jean Castex said on Twitter as he visited a hospital in Saint-Etienne, one if the worst affected areas. He urged French people to respect new restrictions and limit their social contacts.
It may take a while yet to see whether the new measures are working. In the spring, the restrictions only began to have an impact on the health situation after 18 days, Attal said.
The government is counting on less severe restrictions allowing the economy to continue to run at around 85% of pre-crisis levels, instead of as little as 70% in March. Ministers also point to a strong rebound in job creation and economic growth when restrictions were lifted over the summer as a reason for optimism.
“The crisis is particularly violent and brutal for a certain number of sectors, and it will be long lasting. But the French economy’s capacity to resist is exceptional,” Le Maire said.
(Updates with details on Covid-19 cases, comments from government spokesman)
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