The Bank of France expects a modest growth by 2018 – Le Point

Growth is expected to rise only very slowly over the next three years in France, moving from “at least” 1.4% of GDP this year to 1.5% in 2017 and 1.6 % in 2018, according to multiannual estimates released Friday by the Bank of France. According to these projections made on the basis of assumptions adopted in mid-May, French growth should benefit from the increased activity in the euro area, especially favored by monetary policy as “very accommodative” of the ECB.

the domestic demand for its gain momentum, “with an increase in household consumption, particularly in 2016, and the confirmation of a sustained recovery in business investment,” explains the central bank French in a statement. These forecasts are broadly in line with recent projections of the monetary institution, published in December. The growth figure for 2017 was there then however slightly higher, at 1.6% of GDP.

Inflation should remain low

This slight revision the decline in expected growth next year, according to the Bank of France, reflects an international “less favorable” context, because of the slowing global economy, but also the evolution of oil prices, which are expected to recover in 2017 and 2018. the growth would be further hampered in 2016 “with a negative net contribution of foreign trade” due to appreciation of the exchange rate since December, which penalizes exports, with imports for their part supported by strong domestic demand.

inflation, in this context, would remain very low, at 0.2% on average. However, it should recover to 1.1% in 2017 and 1.4% in 2018, due to a gradual increase in energy prices, according to the Bank of France. This scenario of gradual increase in growth will be accompanied, according to the monetary institution, falling unemployment, but again limited. Total employment would increase by 0.7% in 2016 and 0.6% in 2017 and again by 0.7% in 2018. “As the workforce grow by 0.4% per year on the horizon forecast “, this would allow” a small reduction “in the number of job seekers, 10.3% of the workforce in 2015 to 10.1% in 2016 and 10.0% in 2017 and 9.8% in 2018, according to the central bank.

Reduce the deficit

the institution headed by François Villeroy de Galhau also stresses the need “mastery” of spending to achieve the goals deficit reduction and allow the public debt remains “high”, about 96% of GDP in 2015, from flowing back. The government, which expects growth of 1.5% this year, is committed to bring the public deficit to 3.3% of GDP in 2016 and to below 3% of GDP in 2017.

the President of the Eurogroup, Jeroen Dijsselbloem Friday urged the European Commission to be more firm on respect by France of this commitment, considering that the eurozone was playing his “credibility”. In his traditional letter to the President of the Republic, published in mid-May, François Villeroy de Galhau had urged the government to “amplify reforms” to reduce the public deficit, higher than the European average, and “regain growth” economic ” stronger and creates jobs. “