France: Firmer activity

Economic activity picked up in the second quarter but stalled in the third. It is likely to recover and continue growing slightly faster than potential over the forecast period; the output gap should gradually shrink. Sustained by firmer activity, employment growth should gain strength and the fall in unemployment should continue, albeit at a slower pace than in 2006. Wage growth is likely to accelerate slightly and inflation to increase, while remaining moderate.
The government deficit is expected to diminish in 2006 as a result of slower public spending increases and substantial increases in tax revenues. The long-term challenge is to reduce the structural deficit and hence restore the sustainability of public finances in order to cope with the pressures of an ageing population. If any far-reaching improvement in the labour market situation is to be achieved, the cost burden on firms must be reduced and made more predictable and wage moderation must continue.
Population (000s), 200560 873
Area (000 sq km)549
CurrencyEuro
GDP (Billion USD), 20051 896.4
Life expectancy at birth (Women, Men), 2004 83.8, 76.7
Total labour force (000s), 200527 475
Government typeRepublic
Indicators% change unless otherwise indicated
200620072008
GDP growth2.12.22.3
Household savings ratio11.511.511.2
Consumer price index2.01.41.6
Short-term interest rate (%)3.13.84.0
Unemployment rate (%)9.18.58.2
General government financial balance
(% GDP)
-2.7-2.5-2.3
Current account balance (% GDP)-1.7-1.8-1.8
Source: OECD©OECD Observer No. 258/259, December 2006


Economic data

GDP growth: +0.2% Q4 2019
Consumer price inflation: 2.3% January 2020
Trade (G20): -0.1% exp, -1.3% imp, Q4 2019
Unemployment: 5.1% January 2020
Last update: 11 March 2020

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