France: Stronger-than-expected economic recovery in 2021

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The recovery of the French economy, which is expected to grow at the fastest pace in the last 52 years, is proving stronger than expected, putting the labor market on a sound footing in view of the election year in France, according to the forecasts of the country’s statistical office.

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In particular, in the latest Economic Outlook report, the French statistical agency INSEE predicts that the French economy will grow at a rate of 6.7% this year, which is the highest since 1969 and well above the 6.25% expected until recently.

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The eurozone’s second-largest economy is growing strongly as restrictions on tackling the pandemic have eased and the vaccination campaign in the country is accelerating from the middle of the year onwards.

On a quarterly basis, INSEE estimates that the economy will grow by about 0.5% every quarter until mid-2022, after a particularly strong third quarter where growth reached 3%, exceeding expectations.

The statistics agency estimates that in the second half of this year, the French economy created 153,000 net new jobs and that another 80,000 will be added in the next six months as many companies try to increase their workforce to meet consumer demand.

INSEE estimates that the unemployment rate will fall from 7.8% in the fourth quarter of the year to 7.6% by mid-2022, a positive development for French President Emanuel Macron in view of the April presidential election where he is expected to run a second term in the presidency.

This reduction will bring unemployment to its lowest level since 2008.

In terms of inflation, which has soared worldwide this year as a result of rising energy prices, INSEE estimates that it will decline marginally from about 3% to 2.7% by the middle of next year.

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Source From: Capital

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