In its monthly report published Thursday, the National Statistics and Economic Studies (INSEE) forecasts growth of gross domestic product (GDP), French 0.4% in the first quarter and 0.3% in the second quarter. These forecasts, which ensure France a over growth (annual growth if there is no change in the next two quarters) 0.8%, reinforce the government’s position that provides 1% over the year.
However, if the numbers back, two very dark clouds still jeopardizes recovery: on the one hand the unemployment rate will continue to rise according to Insee, the other business confidence does not return since their investment will remain “sluggish” in the first half.
The unemployment rate is expected to rise to 10.2%
The unemployment rate, which reached the 10% of the workforce end of 2014, and should continue to rise to 10.2% in metropolitan mid-2015, finding a new level for almost 20 years late 1997. Economists and government estimate it takes at least 1.5% growth to reduce unemployment.
“It is expected a slight increase in total employment of about 20,000 jobs. But the labor force increases by about 60,000 people, so there will be a rise in the unemployment rate, the same rate as in previous quarters, “said Vladimir Passeron, head of the environment department of INSEE.
For now, the activity will be driven by household consumption, traditional engine of growth in France. It will be linked to an “acceleration of purchasing power,” according to INSEE, due to lower fuel prices, but also “less buoyant tax burden”
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