French cenbank head expects GDP drop in Q4 due to new COVID-19 wave

Growth in the euro zone's second-biggest economy was expected initially to be flat in the final three months of the year from the previous quarter. France recorded a 13.8% drop in gross domestic product in the second quarter after the government ordered one of Europe's strictest lockdowns to curb the outbreak spread.

The French economy will shrink in fourth quarter due to the second wave of new coronavirus infections in the country, Bank of France Governor Francois Villeroy de Galhau said on Thursday.

Speaking at a conference on climate change, Villeroy also said that the drop in gross domestic product (GDP) should be less severe than in first and second quarters. French President Emmanuel Macron and German Chancellor Angela Merkel ordered on Wednesday their countries back into lockdown, as a massive second wave of infections threatens to overwhelm Europe before the winter.

Statistics agency INSEE warned in early October that economic rebound in France was likely to peter out in the fourth quarter as a resurgence of the epidemic weighs on business activity and lowered its outlook. Growth in the euro zone's second-biggest economy was expected initially to be flat in the final three months of the year from the previous quarter.

France recorded a 13.8% drop in gross domestic product in the second quarter after the government ordered one of Europe's strictest lockdowns to curb the outbreak spread. GDP fell by 5.9% in the first quarter.