Viva La France

Issue 26

07.06.20 - The second biggest economy in the European Union returned to growth this month, even as activity in the rest of the region continued to decline.

The $3 trillion French economy grew this month for the first time since February, as coronavirus restrictions were eased and domestic consumption ticked up, according to a closely watched survey. An initial reading of the country's Purchasing Managers' Index, which tracks activity in the manufacturing and services sectors, jumped to 51.3 in June from 32.1 in May. Readings above 50 indicate an expansion.

"France looks to be leading the pack somewhat, especially from a manufacturing sector perspective," Chris Williamson, chief business economist at IHS Markit, told CNN Business. The country is reaping the benefits of having companies that are more domestically focused.

"What we're seeing in all economies is that any revivals in growth are being fueled by domestic demand. If you have an export-oriented manufacturing sector, which is the case in Germany, it acts as a dampener," he added.

French President Emmanuel Macron said in March that no French company, whatever its size, would be allowed to collapse because of the pandemic. The government will be spending close to $521 billion to help its economy recover, French finance minister Bruno Le Maire said in an interview with French radio RTL this month.

Source: BBC, CNN Business