France is paying a heavy price for Macron’s vaccine catastrophe

The United States is growing at such a blistering pace the Federal Reserve may have to raise interest rates. In Britain, retail sales grew by nine per cent this month, the fastest pace on record, as the economy opened up again. Around the world, economies are starting to bounce back strongly from the Covid-19 crisis. Except for one: France. We learned today that the country is now officially in a double-dip recession. The explanation? That is easy. It made a complete hash of its vaccination programme.

In the first-quarter of this year, revised figures showed that France’s output shrank by 0.1 per cent. That followed a 1.5 per cent contraction in the final quarter of 2020, making two consecutive quarters of falling output, the standard definition of a recession. That was driven by an 8.3 per cent fall in household spending – hardly surprising since nothing was open. 

‘The main message from today’s data still is that 2021 GDP forecasts likely will have to be revised down, and that the slowdown at the start of Q2 was fiercer than initially anticipated,’ argued Pantheon Macroeconomics in a note.