31 July 2020

2020

In Q2 2020, GDP shrank by 13.8% Quarterly national accounts - first estimate - second quarter 2020

In Q2 2020, GDP in volume terms declined: –13.8%, after –5.9% in Q1 2020. It is 19% lower than in Q2 2019. GDP’s negative developments in first half of 2020 is linked to the shut-down of “non-essential” activities in the context of the implementation of the lockdown between mid-March and the beginning of May. The gradual ending of restrictions led to a gradual recovery of economic activity in May and June, after the low point reached in April.

Household consumption expenditures dropped (–11.0% after –5.8%), as did total gross fixed capital formation in a more pronounced manner (GFCF: –17.8% after –10.3%). General government expenditure also stepped back (–8.0% after –3.5%). Overall, final domestic demand excluding inventory changes fell sharply: it contributed to –12.0 points to GDP growth.

Exports fell this quarter (–25.5% after –6.1%) more strongly than imports (–17.3% after –5.5%). All in all, the foreign trade balance contributed negatively to GDP growth: –2.3 points, after –0.1 points the previous quarter. Conversely, changes in inventories contributed positively to GDP growth (+0.6 points).

Overall production of goods and services declined sharply (–14.2% after –5.5%). It fell the hardest in construction (–24.1% after –12.8%). Output in goods also declined (–16.8% after –5.6%) as output in market services (–13.4% after –5.0%).

Household consumption dropped in Q2 2020 (–11.0% after –5.8%), more in services (–15.3% after –5.8%) than in goods (–7.1% after –6.8%). With regards to goods, consumption of engineered goods fell strongly (–12.0% after –16.0%) and expenditure on energy declined markedly (–11.1% after –3.7%) notably due to the heavy decline in fuel purchases, related to the lockdown. Food expenditure slightly decreased (–0.5% after +2.8%). With regards to services, expenditure on transport services (−45.8% après −13.1%) and accommodation and food services (–56.9% après –16.5%) plummeted, linked to the administrative restrictions enforced to fight the pandemic.

In Q2 2020, total GFCF fell substantially (–17.8% after –10.3%). In particular, investment declined in construction (–26.2% after –14.5%), in connection with the suspension of building sites during the lockdown and despite their gradual recovery from May, and in manufactured goods (–23.1% after –13.2%).

In Q2 2020, imports declined strongly (–17.3% after –5.5%), notably in manufactured goods. Exports fell in a more pronounced manner (–25.5% after –6.1%), in particular in transport equipment. All in all, foreign trade contributed negatively to GDP growth this quarter (–2.3 points after –0.1points).

In Q2 2020, changes in inventories contributed positively to GDP growth (+0.6 points, as much as in Q1), especially in manufactured goods.

The GDP growth estimate for Q1 2020 is revised downward by 0.6 points to reach –5.9%. This revision is due to the revision of estimates of non-market services and the integration and revisions of indicators.