The French economy is expected to contract a worse-than-expected 8 percent this year, reflecting the effects of a coronavirus lockdown extended until May 11, French Minister of the Economy and Finance Bruno Le Maire said yesterday.
Le Maire had previously forecast a 6 percent decline in GDP for this year, but that was based on a lockdown that lasted one month, instead of the two-month period announced by French President Emmanuel Macron in a televised address on Monday.
Le Maire told BFM television that the 8 percent forecast would be included in a new budget for this year set to be unveiled this week, but added that given the uncertain outlook for economies around the world, not least in the US and Asia, “these forecasts need to be considered with caution.”
Photo: AFP
A massive relief effort for bars, restaurants, hotels, shops and other businesses closed during the lockdown would push France’s budget deficit up to 9 percent of GDP this year, French Minister of Public Accounts and Action Gerald Darmanin said separately in an interview with France Info radio.
“Each day, each week of confinement ... is worsening our public finances,” he said, adding that France’s debt pile would soar to 115 percent of GDP, up from just under 100 percent last year.
Both forecasts are well above the limits set by the EU’s Stability and Growth Pact, which calls for deficits to be capped at 3 percent of GDP and a debt-to-GDP ratio of 60 percent.
However, EU officials have signaled that the rules are to be suspended as governments scramble to contain the economic fallout, and prevent mass bankruptcies and layoffs.
Le Maire said that government aid for smaller companies at risk of going under, after losing at least 50 percent of their revenue, would be raised to as much as 5,000 euros (US$5,466), up from 1,500 euros previously.
The total amount of the rescue fund totals 7 billion euros, he said.
Economists have said that the EU is heading for a double-digit percentage slump in the first half of this year amid widespread lockdowns.
A monthly survey by Bloomberg puts the contraction in the eurozone at more than 10 percent in the January-to-June period, with most of the hit — 8.3 percent — in the second quarter.
Even with an expected rebound later in the year, the bloc’s output is likely to decline more than 5 percent this year.
The Bloomberg survey shows widespread damage to eurozone economies this quarter, with Germany likely contracting 7.6 percent, Italy 8.8 percent, Spain 10 percent and the UK nearly 12 percent.
The timing of any rebound depends on when restrictions on movement, gatherings and businesses are lifted, or at least eased.
While some governments have indicated that they expect to relax some rules, the rapid spread of the virus so far suggests a return of normality remains a distant prospect.
Additional reporting by Bloomberg
ENERGY ISSUES: The TSIA urged the government to increase natural gas and helium reserves to reduce the impact of the Middle East war on semiconductor supply stability Chip testing and packaging service provider ASE Technology Holding Co (日月光投控) yesterday said it planned to invest more than NT$100 billion (US$3.15 billion) in building a new advanced chip testing facility in Kaohsiung to keep up with customer demand driven by the artificial intelligence (AI) boom. That would be included in the company’s capital expenditure budget next year, ASE said. There is also room to raise this year’s capital spending budget from a record-high US$7 billion estimated three months ago, it added. ASE would have six factories under construction this year, another record-breaking number, ASE chief operating officer Tien Wu
The EU and US are nearing an agreement to coordinate on producing and securing critical minerals, part of a push to break reliance on Chinese supplies. The potential deal would create incentives, such as minimum prices, that could advantage non-Chinese suppliers, according to a draft of an “action plan” seen by Bloomberg. The EU and US would also cooperate on standards, investments and joint projects, as well as coordinate on any supply disruptions by countries like China. The two sides are additionally seeking other “like-minded partners” to join a multicountry accord to help create these new critical mineral supply chains, which feed into
For weeks now, the global tech industry has been waiting for a major artificial intelligence (AI) launch from DeepSeek (深度求索), seen as a benchmark for China’s progress in the fast-moving field. More than a year has passed since the start-up put Chinese AI on the map in early last year with a low-cost chatbot that performed at a similar level to US rivals. However, despite reports and rumors about its imminent release, DeepSeek’s next-generation “V4” model is nowhere in sight. Speculation is also swirling over the geopolitical implications of which computer chips were chosen to train and power the new
TECH WINNERS: Taiwan and South Korea reported robust trade, which suggests that they have critical advantages in the rapidly expanding AI supply chain, an official said Exports last month surged to a new high, as booming demand tied to artificial intelligence (AI) infrastructure fueled shipments of advanced technology components, underscoring the nation’s pivotal role in the global semiconductor supply chain. Outbound shipments climbed to US$80.18 billion, the highest ever for a single month, rising 61.8 percent from a year earlier and marking the 29th consecutive month of growth, the Ministry of Finance said yesterday. “The surge was driven primarily by global investment in AI infrastructure,” Department of Statistics Director-General Beatrice Tsai (蔡美娜) said. The mass production of next-generation AI computing systems has accelerated procurement across the semiconductor supply
RSS