Monday, June 13, 2016
France's economic outlook.
France's growth is showing signs of revival. In the first quarter, it was supported by household consumption, which contributed 0.6 percentage points (pp) to a quarterly GDP rise of 0.6%. The second-largest contributor was fixed investment by non-financial corporations (0.3 pp), while net trade and inventories detracted 0.2 pp each. On a year-on-year basis, GDP expanded by 1.3%, compared with 1.2% in 2015. Employment is rising, although the unemployment rate remains high, at 10.2%.
- Inflation will stay subdued this year and accelerate slightly in 2017.
- The short-term impact of the labour disputes on the economy and policy-making will be limited.
- In the long term, a withdrawal of the labour reform would undermine support for reformist trade unions.