A fresh lockdown in France will dent economic growth this year but it is too early to say by how much, the finance minister, Bruno Le Maire, has warned.
Amid concerns that increasing infection rates across much of continental Europe will slow the recovery from the pandemic, Le Maire indicated on Friday that a forecast of 6% GDP growth this year may need to be revised downwards.
President Emmanuel Macron on Wednesday ordered France into its third national lockdown and said schools would close for three weeks as he sought to tackle a rising wave of infections and prevent hospitals from being overwhelmed.
France reported more than 50,000 new Covid-19 infections on Thursday and 308 deaths, while the number of people in intensive care units rose to 5,109.
Belgium was one of several European countries to join France in imposing tighter restrictions. From this weekend the government in Brussels said schools would be closed, borders kept closed, there would be limited access to non-essential shops and it lowered the number of people able to meet outdoors to four.
Le Maire said: “These measures will impact economic growth in 2021. We are in the process of assessing it. There will be a new evaluation in the coming days.”
He added the new lockdown measures, which will also restrict travel and gatherings to six people, would force the temporary closure of 150,000 businesses at a cost of €11bn (£9.3bn) a month.
The Bank of France governor, François Villeroy de Galhau, said he did not expect the new restrictions to have an impact on the bank’s forecast of 5.5% growth in 2021, provided the restrictions did not last beyond early May.
Eurozone manufacturers recovered strongly in March, according to business surveys that said a similar recovery was under way in the US and Britain.
However, the ratings agency S&P Global said Europe faced an uneven and slower recovery than previously expected “following delays to the vaccine rollout across the continent, vaccine hesitancy, the emergence of a third wave, and the threat of dangerous new variants”.
Ana Boata, the head of economic research at insurer Euler Hermes, said the speed of vaccine rollouts was “the primary factor” dictating how quickly economies recovered.
“At the current pace of vaccination, the US and the UK will reach herd immunity in May. While Europe should be able to vaccinate its vulnerable population by the summer, herd immunity is not likely to be reached before the autumn at the current pace of vaccination unless governments ramp up their efforts,” she said.
Boata has calculated that the seven-week delay in vaccination across Europe is equivalent to €123bn of economic losses, equivalent to one year of the EU’s six-year, €750bn stimulus package. .
Le Maire said vaccine delays meant stimulus funds must be handed to member states without delay.
“Europe must understand that we must move fast and that the stimulus funds promised to European citizens must now arrive in member states … In 2022 or 2023 it will be too late. The Chinese and the Americans will be ahead of us,” he said.
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Though the 27-nation bloc agreed the landmark stimulus fund last summer, EU governments are still submitting detailed plans on how they aim to spend money from the fund, which many still need to ratify.
Boata said household savings across the EU, which she estimated have increased by about 40% to €530bn during the pandemic, could come to the rescue.
“But an acceleration of the vaccination rollout is needed to ensure it can be unleashed to inject much-needed life into the eurozone economy,” she said.
This content first appear on the guardian