The coronavirus-wracked French economy will see economic growth rise to 5% this year from a massive 8.1% contraction in 2020, a result that would have been better were it not for a new wave of COVID-19 infections.
Minister of the Economy and Finance Bruno Le Maire said the recently imposed third lockdown to control the still virulent pandemic prompted the downward revision in the previous forecast of 6% growth. A Bloomberg survey in March showed economists were expecting the economy to expand by 5.7%.
Le Maire said the smaller economic forecast is prudent.
"Our fundamentals are sound; we will be able to bounce back," according to Le Maire.
"Closing education establishments and 150,000 stores is essential to slow the spread of the virus, but these measures will have an impact on the French economy," said Le Maire Sunday. "This estimate is both sincere and cautious."
The latest lockdown will last four weeks starting Saturday night. It followed a distressing week that saw more than 200,000 new COVID-19 cases and some 5,500 patients in intensive care.
The new lockdown will see the closure of non-essential stores such as clothing chains while schools will remain shut for three weeks, including the holiday period. Bars and restaurants will remain closed, as they have been for months, while tourism will continue to suffer.
France entered its first lockdown on March 17, 2020 but unlike then, construction and manufacturing businesses will remain in operation this time around.
Le Maire said government assistance to businesses hit by the lockdown might cost up to $12.9 billion in April. He said the European Union must not delay the $5.9 billion France is slated to receive in July from the $882 billion-euro fund but this is now unlikely.
Bank of France Governor Francois Villeroy de Galhau urged the EU to quickly implement a joint recovery fund to help countries cope with the impact of COVID-19.
President Emmanuel Macron announced the country's third national lockdown last week. His decision comes as a third wave threatens to overwhelm the already stressed health system.
Before Macron's announcement, the number of patients in ICUs surpassed levels during the second wave in the autumn.
The increase in cases is being mostly driven by the more contagious B.1.1.7 variant, which might now account for more than 75% of all cases in France, said health officials.
Last Sunday, 41 ICU and emergency doctors published a letter in the newspaper, Le Journal du Dimanche, saying hospitals in Paris are on the verge of being "overwhelmed" by the rising number of COVID-19 patients.
The critical care doctors warned they might soon be forced to choose which patients they have the resource to treat, in other words, choosing which patients should live or dies.
