On the only fourth quarter, economic activity has, however, accelerated. The growth has thus risen to 0.4%, against 0.2% between July and September and a decline of 0.1% in the spring, according to figures released Tuesday by the national Institute of statistics and economic studies (Insee).
“The year 2016 ends on a positive note, with activity accelerating significantly in the fourth quarter. This is the sign of a recovery, which installs sustainable and, most importantly, who grows“, welcomed the minister of Economy and Finance, Michel Sapin.
On the whole of the year, the revenue growth is, however, 0.3 percentage points below the forecast of the government, which had readjusted its forecast from 1.5% to 1.4% in the fall. In addition, it is slightly down compared to 2015 (1.2%), and significantly below the figure for the euro area, where growth reached 1.7% in 2016.
A development that has not prevented Michel Sapin to acknowledge the ‘ dynamic” economic of France. “For the second year in a row“, activity “has helped to reduce unemployment, while reducing the public deficit“, assured the minister in a press release.
The reversal of the unemployment curve, as promised by François Hollande, has finally come to a conclusion in 2016, Pôle emploi, recording its first annual decline since 2007. Still, unemployment is massive in France, with 3.47 million people without activity (category A) in metropolis.
On France Inter, Mr Sapin called for them not to dwell on the single-digit growth. “The quest of 2% or 3% growth, it has not more meaning today“. And “if this were to happen, it would be under conditions not necessarily create jobs, nor very respectful of the planet“, he estimated.
- risk Factors
For Stéphane Colliac economist at Euler Hermes, “the poor performance of the agricultural sector is a major determinant” to the slowdown, the bad weather has caused output to fall, which cost 0.2 point of growth in France.
“The activity has patina, due in part to poor results in foreign trade“, has underlined his side, Denis Ferrand, director of the institute Coe-Rexecode, insisting on the “lack of competitiveness” persistent French companies.
According to the Insee, the exports have only increased by 0.9% after an increase of 6% in 2015, while imports have remained strong (+3.4 per cent). The trade deficit and reduced growth of 0.9-point in the last year, up from 0.3 percentage point in 2016.
The economy has, however, benefited from the good performance of household consumption, which rose 1.8% on the year as a whole, a figure to increase compared to 2015 (+1.5 per cent).
business investment, another engine which is indispensable to a sustainable recovery of the activity, for its part, has increased by 4.3%, which is twice more than the previous year (+2%), according to Insee.
It has especially accelerated in the fourth quarter after two quarters the most gloomy, the business leaders who anticipated the end of the device of suramortissement tax on productive investment, due in April.
“The question is” if the momentum from the end of 2016, “will be sustainable or not,” says Denis Ferrand, who recalls that France has taken advantage to the fullest, the past two years, falling interest rates and oil prices, now over.
For the Xerfi consultancy, the consumer, in particular, “will wedge it in 2017“. “This is the consequence of rising inflation on the purchasing power in a context of growth under strong constraints of wages“, a-t-he estimated in a press release.
According to the Insee, the growth is expected to increase by 0.4% in the first and second quarter of 2017. The unemployment rate – according to the calculation method Insee which differs from that of unemployed – should decline slightly, to reach out to mid-2017 9.5% of the active population in france and 9.8% with the overseas departments.