France: growth recovers tentatively, not employment – Boursorama

The growth is back in France, the decline in unemployment wait.

INSEE expects 0.4 % growth in the first quarter and 0.3% in the second while Bercy confirms its realistic forecast of 1% for the full year. These figures remain insufficient to reduce unemployment by 2015. More ambitious structural reforms must be implemented OECD believes his side in a report.

The French economy will better. Nothing wondrous course, but forecasts of INSEE a growth of 0.4% from January to March and 0.3% from April to June confirm those of Bercy still expects growth of 1 % in 2015 against a timid 0.4% last year. No reason indeed this time to criticize the Ministry of Economy its forecasts generally too optimistic and often contradicted by reality. The OECD, little suspicious of indulgence towards France, expects his side 1.1% and COE-Rexecode body, close to the business, has just raised hers from 0.8 to 1.2%. Therefore growth is back in France, to an even slower pace compared to the dynamics of Britain or the United States (economies that have turned to 2.5% in 2014), but the rebound is definitely there and the French growth is, according to INSEE, the average of the euro area.

The situation is improving in France, but the unemployment rate continues to progress

However, it would be wrong to cry triumphalism. This recovery is primarily driven by external factors: oil prices fall which gives the purchasing power to households and the decline of the euro gives air to exporting companies. Corporate margins are also expected to increase this year. It is true that companies also benefit from a more favorable tax environment with the rise of the IECC and starting the responsibility Covenant.

Unemployment rate 10.2%

“ The oil price decline will represent 10 billion euros of additional purchasing power for households in 2015 ” Michel Sapin said Thursday while the power household spending is expected to exceed 1.6%, the largest increase in five years. Consumption is thus expected to grow by 0.6% in the first quarter and 0.3% in the second quarter.

The black dot in the French economy remains the deteriorating situation of the market for employment. With assisted contracts, France would stop destroying jobs. Twenty thousand jobs could be created in the first half. However, not enough to reduce the unemployment rate will exceed 10.2% this year. According to the OECD, the most favorable macroeconomic conditions will not be enough to sustainably reduce unemployment without further structural reforms. For the international organization, which called on Thursday a detailed report on the state of France, labor market reform should be placed among the top priorities by the government. While the OECD welcomes the ongoing reforms, their impact is still “too limited”. Further reforms will also be accompanied by the organization, a necessary reduction in public spending without committing too restrictive fiscal policies. The recovery is still too fragile to allow excessive rigor in this area.

Julien Gautier