France’s economic outlook for 2017.
Since 2014, growth in France has trailed that in the euro-area as a whole. After averaging a mere 0.5% per year in 2012-14, GDP growth recovered in 2015 to 1.3%, but has failed to accelerate. In 2016, GDP expanded by 1.2%, according to official estimates. GDP growth is expected to converge towards the euro-area’s average in 2017, but this is due to the expected slowdown in the euro-area rather than France’s better performance.
The country will look to the new president, elected in May 2017, to reduce unemployment and mend the public finances.
Nevertheless, radical reform plans are likely to meet fierce resistance, including from trade unions.
Reversing the strong and long-standing erosion of France’s external competitiveness may be difficult.
