INSEE foresees an acceleration in French growth in 2015 – Le Point

INSEE expects an acceleration of growth in 2015 after three years in France “dull” and is more optimistic than the government, however, calming his hopes on falling unemployment. In its new “Conjoncture” published Thursday, the National Institute of Statistics and Economic Studies expects growth in gross domestic product (GDP) “relatively strong end of 2015″ with 0.3% in the second and third quarters and 0.4% in the fourth.

This leads to an annual average growth of 1.2% for 2015, a “significant acceleration” after “three very dull years” having known an increase in GDP of 0.4% per year on average. This prognosis joined predicting the Bank of France published in early June and confirms the government still officially expects 1% growth in 2015, although he has hinted that he did not rule out a higher figure in the end.

Sapin is satisfied

“By providing growth above 1% this year, INSEE confirms that France is clearly back in the business of recovery phase” welcomed the Finance Minister Michel Sapin. But even if these figures clash over previous years, “GDP does however not regain growth in 2010 (+ 1.9%) and 2011 (+ 2.1%), mainly due to a still modest restart business investment (+ 1% in 2015 against 4% on average in 2010 and 2011) and the sharp decline in the household sector (-4.7% in 2015 against 1.5% in 2010 and 1% in 2011), “tempers INSEE.

Furthermore, Insee expects the French economy took a growth rate of 1.6% year on year end of 2015, “sufficient growth to start training as employment and stabilize unemployment,” according to Vladimir Passeron, head of the economy department.

Unemployment is expected to grow

According to the institute, the unemployment rate is expected to increase by 0.1 points in the second quarter to 10.1% in France and then stabilize at this level until the end of the year, due to an expected increase in job creation (60 000), which would absorb most of the increase in the workforce (63 000). However, it does not foresee for the time the light curve inversion unemployment announced by the OECD and UNEDIC (unemployment insurance) for the second part of the year unless the “number of unemployed expressed discouraged (wanting to work but not having actively sought employment) continues to increase “. President Francois Hollande, who has failed to reverse the unemployment curve at the beginning of his term as he had promised, knows he will be judged on results in this area at the end of his term.

On the business side, investment is expected to accelerate in the third and fourth quarter (+ 0.6% and + 0.8%), mainly due to margin which dates back significantly due to tax credit competitiveness and employment (CICE), employer contributions cuts planned in the responsibility Pact, the decline in oil prices, as well as the easing of external financing conditions to facilitate access to credit. Indeed, business investment is expected to take over in the second half of consumption, which ought to remain relatively strong, mainly because of the strong purchasing power (+ 1.9% in 2015, against 1.1 % in 2014) carried himself particularly “by the smaller increase in the tax burden.” However, the household investment in new housing should fall sharply in 2015.

Inflation should remain low for its part by the end of 2015 to 0.6% in December ( 0.4% for underlying inflation, calculated without regard to consumer goods to the most volatile prices).