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France and Germany slowly emerge from severe recessions

In a note to clients, the Dutch bank ING wrote, "The big question now is whether France will manage to avoid a second recession in 15 months."

January 30, 2021 / 02:47 PM IST
 (Image: Wikimedia)

(Image: Wikimedia)

Severe recessions in Germany and France last year, caused by the coronavirus pandemic, began to improve slightly toward the end of 2020, as a second series of lockdowns had a milder impact on their economies, those governments reported on Friday.

But prospects for a hoped-for recovery this year in Europe’s two largest economies may be delayed as a new variant of the virus circulates and as problems emerge in the rollout of vaccines, economists warned.

The French economy shrank by 8.3 percent last year as two sets of national lockdowns, lasting months, dealt strong blows to business activity, the national statistics agency reported on Friday.

But the overall contraction was less than expected. By reducing the strictness of the nation’s second lockdown, which went into effect in October and was mainly limited to restaurants and cultural events, the government avoided a worse economic hit, the statistics agency said. Growth in the fourth quarter fell 1.3 percent compared with the same period a year earlier — far less than the 4 percent contraction forecast by many economists.