France loses 27 pct of economic activities in April: central bank

France economic activities operate at 27 percent below normal levels

PARIS, May 12 (Xinhua) -- Struggling to cushion coronavirus epidemic's heavy impact, France, one of Europe's key powerhouse, saw its economic activities operate at 27 percent below normal levels but better than in March, France central bank BdF said on Tuesday.

"According to the monthly business survey, activity losses remained significant in April, but at lesser magnitude than at the end of March with the exception of certain sectors such as household services," the bank said in a statement.

Based on the interviews of 8,500 business leaders from April 28 to May 6, the BdF found that the domestic economy was operating at 27 percent below normal levels in April after it had dropped by 32 percent a month earlier.

"With a full month of confinement in April (compared to half a month in March as the anti-coronavirus lockdown started on March 17), economic activity reached a particularly low level," it said.

"However, companies have adapted and gradually implemented various health protection measures for employees, which made it possible to limit site closing and restart production, at a rate nevertheless much lower than normal and uneven depending on the sector," it added.

The bank noted an improvement in manufacturing industry and private sector service firms in particular. The two sectors limited their slowdown to minus 37 percent and minus 27 percent in April from minus 48 percent and minus 37 percent respectively in March.

Manufacturing, construction and non-financial market services, which together account for 55 percent of France's GDP, lost 40 percent of their activity compared with normal situation. In March, the decline was set at minus 50 percent.

For May, business leaders expected partial recovery of their activity as the country has begun unwinding containment measures.

"The ambition we could have for the end of May is to recover another 10 points. Household confidence will be an essential factor in transforming this additional savings into consumption," Francois Villeroy de Galhau, governor of BdF told France Inter radio.

"The confinement has cost us some 6 percent of annual growth," the governor added.

In April, France's national statistics institute INSEE said the GDP has tumbled by 5.8 percent in the first quarter and the government forecast a contraction of 8 percent for the whole year. The central bank had estimated that every two-week containment would lead to a 1.5-percent loss in GDP.