PARIS: A much-expected rebound of France's Covid-battered economy failed to materialise in the first quarter as key sectors remained sluggish after over a year of virus restrictions, official data showed Friday.
Gross domestic product contracted by 0.1 percent in the first three months of the year, the Insee statistics agency said, in a sharp reversal of its previous estimate of 0.4 percent growth.
French authorities began ordering business closures and travel bans in several regions in March - the tail end of the quarter - ahead of a third round of coronavirus restrictions implemented in April to curb rising Covid cases.
France has since entered a phased reopening of the country.
The crucial construction sector, in particular, was slow to ramp up activity after a devastating year for the French economy which declined by more than eight percent in 2020.
The sector was "substantially less dynamic" than expected, Insee said.
Investment, household spending and production also fell short. The French government was nevertheless quick to confirm its five-percent GDP growth objective for the full year 2021.
"This doesn't change our target in any way," Finance Minister Bruno Le Maire told reporters, calling the first quarter slowdown "an automatic revision" linked to 2020 growth that he said had held up better than thought.
Calling on the country to "keep cool and not be disheartened by this or that number", Le Maire said that current indicators "are all pointing upwards".
Diego Iscaro, senior European economist at IHS Markit agreed, saying the weaker figures "do not change the big picture".
While the gradual reopening of the economy should lead to a "strong rebound in activity", he also told AFP that any worsening of the pandemic could lead to tighter restrictions again.
A better vaccine rollout of vaccines had, however, diminished the likelihood of such a scenario.
Meanwhile, early indications for France's April performance, published separately by Insee, showed that the economy remains under pressure. Consumer spending declined 8.3 percent in April from March, with spending on manufactured goods alone tumbling nearly 19 percent, a fall Insee blamed on "the third lockdown".
Spending on food slipped just 0.2 percent in April.
But even as the economy remains soft, inflation has picked up with consumer prices rising by 1.4 percent year-on-year in May, according to an early estimate, after 1.2 percent in April, Insee also said.
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