France economy to shake off Paris shock: analysts

Paris: France can withstand the financial shock of the Paris attacks, analysts say, despite people deserting big stores, shunning concert halls and cancelling hotel bookings.

Beyond the incalculable human cost, the experience of attacks in New York in 2001, Madrid in 2004, London in 2005, and Bombay in 2008 shows the economic impact may be fleeting.

The November 13 jihadist shooting and bombings in the French capital, which killed 130 people and wounded hundreds more, led to an immediate 80-percent plunge in concert ticket sales, an association of promoters said.

Shoppers also fled Paris’ iconic department stores Printemps and Galeries Lafayette, which reported customer numbers tumbling by between 30 and 50 percent.

Hotels, too, reported a slump in bookings.

Such reactions are likely to be transitory, however, analysts said.

After the March 11, 2004 Madrid train bombings, which killed 191 people and wounded nearly 2,000, the capital’s Complutense University estimated the cost to the city’s economy at 0.16 per cent of annual economic output and the cost to the country at 0.03 per cent of output.

In Britain, consumer confidence took a hit when four co-ordinated suicide attacks on three London underground trains and a bus killed 56 people. But a budding economic recovery continued, said analysts at BNP Paribas.

“In the similar attacks in Madrid and London, the impact on country-wide statistics and overall consumer confidence was relatively small,” said a report by Goldman Sachs.

The Paris attacks differed, however, because they came only 10 months after gunmen attacked satirical weekly Charlie Hebdo, killing some of France’s most beloved cartoonists in a rampage that left 17 dead there and elsewhere in the city.

“While the terrorist attacks on Paris came at a massive human cost to the city and to France more widely, the sanguine reaction of the financial markets to the atrocities and past experience of similarly tragic events suggest the economic impact is likely to be limited,” BNP Paribas analysts Dominic Bryant and Gizem Kara said in a report.

“As this is the second attack on Paris in less than 12 months, however, there is some risk of a greater reaction than elsewhere, particularly as the French economic recovery has been relatively tepid,” they said.

In Mumbai, India, where Islamist gunmen stormed luxury hotels, the main railway station and other sites in November 2008, killing 189 people, businesses reported a plunge in profits and a wave of cancellations by tourists.