France’s central bank said on Monday that France’s economy is set to return to growth in the first quarter of the year, while coronavirus restrictions disrupt a stronger recovery.
The bank added that the second largest economy in the euro area will likely register “slightly positive” growth in the first three months of this year compared to the previous quarter (last year), when it contracted 1.4 percent.
The French central bank said in its monthly economic forecast that the growth rate for the first quarter if it continues throughout 2021 as a whole, the economy will record an annual growth of four percent this year.
The bank had forecast 5 percent growth in December for the current year, and next week is expected to provide an in-depth update of its long-term economic outlook.
The French government imposed new restrictions related to the Coronavirus in some areas of the country in light of new HIV infections still high, and ordered the closure of large shopping centers. But it has yet to impose a third wave of lockdowns across the country.
The central bank estimates that French economic activity is currently five percent lower than pre-pandemic levels.