French Economy 'Under Anesthesia' As Virus Lockdown Takes Toll

France's coronavirus lockdown has eroded economic activity to a bare minimum, the national statistics office said Thursday, as officials weigh the risks of trying to reopen businesses even as infections remain high.

"Like a person placed under anaesthesia, the French economy can now ensure only its vital functions," INSEE said, estimating that activity in the private sector, which makes up around three-fourths of total GDP, had plunged 41 percent overall.

Some industries, like construction, restaurants and tourism, have effectively been at a standstill since the business closures and stay-at-home orders were announced in mid-March.

Separately, the IHS Markit survey of private-sector activity hit a historic low in April after already setting one in March, dropping to just 11.2 from 28.9 a month earlier.

Any number under 50 indicates a contraction in business activity.

Like their counterparts across Europe, French blue-chip companies have reported steep earnings declines and warned that thousands of jobs could be at risk without help, even if lockdown restrictions are eased soon.

More than 10 million employees in France -- one out of every two in the private sector -- have been laid off during the lockdown, a figure likely to rise in the coming weeks, the government said this week.

Even electricity use has plunged, with grid operator RTE saying Thursday that consumption is down an unprecedented 20 percent since the lockdown began.

The government has already warned of an eight percent contraction for GDP this year and is hoping that some restrictions can be lifted starting May 11.

But cafes, bars and restaurants will stay closed and large public gatherings prohibited. Travel restrictions both within France and beyond its borders could remain in place for months, stifling tourism during the key summer vacation season.

President Emmanuel Macron has announced a 110 billion euro ($120 billion) package of aid and financial relief, saying the government will not stand by and let firms fail.