The inversion of the curve of unemployment envisaged by INSEE – Challenges.fr

Yann Le Guernigou

PARIS (Reuters) – Unemployment is expected to fall to 9.5% of the active population at the end of the year in France, 0.4 point lower in 2015, predicts Thursday INSEE finally embodying the reversal of its curve after which the government runs since 2013.

in a monthly report published Thursday, the Institute anticipates in along with the growth of the French economy will reach 1.6% this year after 1.2% in 2015, thanks to the resilience of household consumption and acceleration of business investment.

He stressed that, with declines burdens for businesses and hiring subsidies in SMEs, this growth will be more jobs, with the effect that the ILO unemployment rate should return to 9.5 %, its highest level since the fall of 2012, the beginning of the quinquennium of Francois Hollande.

a sword of Damocles hangs over these forecasts, however, that an exit Britain of the Union European, a risk that INSEE would not quantify.

“Clearly, the hypothesis of a ‘Brexit is a downside risk,” said Vladimir Passeron, head of the environment department INSEE, but without quantifying its impact.

“It’s a shock that concern first the British economy, which largely depend on the speed with which uncertainty will be lifted on the nature of the agreements trade between the EU and the UK, “said he said.

Meanwhile, Finance Minister Michel Sapin, welcomed forecasts of INSEE, which do more than reinforce the 1.5% growth scenario of the French economy held by the government for this year.

“These forecasts lead us to continue to implement our policies to support the activity, employment and purchasing power, “he said in a statement.

the high pace of growth in the first three months of 2016, revised in late May + 0.6% (0.1 points more than previously), said INSEE slightly more optimistic that the international organizations, whose expectations are between 1.3% and “close to 1.5%”.

in the shorter term, the institute sees the second-quarter GDP advance of 0.3%, where it anticipated prior 0.4% and 0.3% in the third and again 0.4% in the fourth

a TRADE DEFICIT UP

While the French economy was largely driven last year by external factors -. interest rates very low oil drop and the euro, recovery in southern Europe – they should still play in 2016, but to a lesser extent

for the expected acceleration will be foremost. due to domestic demand, with private consumption (+ 1.6%) that would record its biggest gain since 2010 thanks to the restart of the job and a business investment up 4.7%, which n ‘had not happened since 2007, the momentum of his early strong year.

added to positive developments in two positions that have weighed on growth last year, investment households, benefiting from improved housing market, and that of governments.

There is one big downside, foreign trade, which should contribute negatively to the tune of -0.7 point french GDP this year and whose INSEE noted the deterioration in parallel rebound in business investment.

the trade deficit excluding energy could reach him by 22 billion euros, the equivalent of a of GDP and the highest since 2011.

with regard to employment, the institute expects 139,000 net new jobs in the market sector this year, 30,000 more than in 2015 and 209,000 throughout the economy.

the impact of this total CICE (competitiveness employment tax credit) and drops loads of responsibility pact would still 55,000 jobs (80,000 in 2015 ), which would be added 40,000 jobs created by aid to SMEs.

the INSEE estimates that finally accelerating the training of unemployed expected this year will reduce the number of about 30,000 this will contribute 0.1 points to lower expected overall rate.

(Yann Le Guernigou, edited by Jean-Baptiste Vey)