France growth to slow sharply in 2018 — Statistics
PARIS: France’s economic growth will fall from 2.3 per cent to 1.7 per cent in 2018, the national statistics agency forecasted, adding to the budgetary strains on President Emmanuel Macron’s cost-cutting government.
Macron’s administration, which is on a mission to cut spending and keep France within European Union deficit targets, had been targeting growth of 2.0 per cent for 2018.
“Growth is solid,” Finance Minister Bruno Le Maire insisted on Monday, adding he had “no particular concerns” on the subject.
But statistics agency Insee predicted the government would fall far short of its goal, dragged down by a strong euro and rising oil prices among other factors.
It expects gross domestic product (GDP) to rise by 0.3 per cent in the second quarter – up from 0.2 per cent in the first quarter – and by 0.4 per cent in both the third and fourth quarters for a full-year figure of 1.7 per cent.
France’s central bank earlier this month downgraded its 12-month growth figure to 1.8 per cent.
After a “particularly sunny” year in 2017 for France and the eurozone, “clouds have appeared”, the head of Insee’s economic outlook division Frederic Tallet said.
On the domestic front the tailwinds include sluggish household consumption and nearly three months of rolling train strikes estimated to set back second-quarter growth by 0.1 percentage points.
But they also include external factors over which France has less traction, such as threats of a global trade war, rising oil prices, a strong euro and political uncertainties in Europe, including a new far righteurosceptic coalition in power in Italy.
Corporate investment is predicted to slow from 4.4 per cent to 3.1 per cent over the year, while household investment is expected to decelerate from 5.6 per cent in 2017 to 1.6 per cent.
There was good news on the trade and unemployment fronts, however.
Unemployment, which is running at nearly twice the level of Germany or Britain, will fall only marginally, Insee said, forecasting a jobless rate of 8.8 per cent at the end of 2018, down from 9.0 per cent at the end of 2017. — AFP