French central bank sees full rebound in GDP in wake of virus lockdown

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PARIS (Reuters) - The French economy is on course to bounce back this quarter as much as it probably slumped in the previous three months, the central bank estimated on Monday, saying it might need to revise up its 2020 forecast.

The euro zone’s second-biggest economy could expand by an unprecedented 14% in the third quarter if activity remains at least at current levels, the Bank of France said.

It estimated that the economy had shrunk an equally unprecedented 14% in the second quarter as France began emerging from a nationwide coronavirus lockdown, slightly less than its previous projection for a 15% contraction.

The government imposed one of the strictest lockdowns in Europe in mid-March, plunging the economy into a 5.3% slump in the first quarter alone. Lockdown restrictions began to be lifted on May 11.

The central bank estimated that the economy was operating down 7% from normal levels, an improvement from 9% last month and 32% at the start of the lockdown in March.

If the recovery keeps on track and the outbreak remains under control, the Bank of France said it could revise up its forecast for a contraction of 10% this year, which is already more optimistic than the 11% slump expected by the government.

Reporting by Leigh Thomas; Editing by Hugh Lawson