France: Resilient consumers

Real GDP is projected to fall by about 3% in 2009, with the pace of contraction gradually diminishing through the year. The recovery in 2010 is likely to be slow, with output growing below potential rates throughout the year.

Still resilient private consumption and large automatic stabilisers are moderating the contraction in domestic demand, and France is less exposed to the collapse in world trade than some other countries. Both underlying and headline inflation could fall to near zero by end-2010.

The budgetary measures put in place to face the crisis are starting to take effect and are largely self-reversing. The downturn will nevertheless lead to sharp deficit increases, so that credibly restoring public finances will be a key challenge in the years to come. Once the recovery is firmly anchored, the government should therefore implement a medium-term package of spending cuts and tax base broadening that will ensure fiscal sustainability.

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©OECD Observer No 274, July 2009

Economic data

GDP growth: -9.8% Q2/Q1 2020 2020
Consumer price inflation: 1.3% Sep 2020 annual
Trade (G20): -17.7% exp, -16.7% imp, Q2/Q1 2020
Unemployment: 7.3% Sep 2020
Last update: 10 Nov 2020

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