France's economy is slowing less than expected in April, says Bank of France

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France's economy is slowing less than expected in April, says Bank of France

The French economy is only moderately slowing in April due to the tightening of the Covid 19 restrictions, easing fears that school closures would cause a deeper contraction.

The Bank of France said in April that the activity will decline to 7% below the precrisis levels after President Emmanuel Macron imposed stricter travel restrictions and ordered schools and nurseries to close. According to the institution's monthly survey, the effect of activity in March was 4%, better than previously estimated thanks to improvements in services, industry and construction.

The French Minister of Finance Bruno Le Maire warned the latest set of measures would dampen the economic rebound this year. The central bank data add to the evidence that European economies are more resilient than they were a year ago in the face of second and third lockdowns to control infections.

Although this estimate is subject to various risks, it shows the economy's heightened resilience to tougher health restrictions, said the Bank of France.

Greater use of social working and better management of remote distancing rules contributed to less drastic dive, chief economist Olivier Garnier said. He said that less industries are closed than a year ago, more stores remain open and stronger global trade is supporting manufacturing, also added.

The April survey of 8,500 businesses found that the sharpest declines in the service sector activity are in sectors such as car repair, equipment leasing, hotels and leisure.

The Bank of France still expects the economy to grow in the first quarter and that it will be about 5.4% in 2021.

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