France’s economy expands for the fifth consecutive quarter, performing its best year since 2011. The economy growth received impetus after the election of the new President Emmanuel Macron and the favorable global trends that together stimulated confidence and investment. The France’s Gross Domestic Product grew by 0.6% in the three months to December 2017, coinciding with expectations. The capital investment also recorded growth of 1.1%, as well as household spending (by 0.3%).
The recovery of the French economic situation comes after years of sluggish growth, receiving a strong boost from President Emanuel Macron’s economic reforms, as well as the cuts in corporate taxes introduced by the previous administration. The good year for Paris coincides with the acceleration in the Eurozone, with the 19 member states reporting the best growth for the last decade.
For 2018, the growth of the economy reached 1.9%. This is the fastest pace since 2011 and significantly above 0.8% on average for the ten years to 2016.
However, the economists assumptions are that in 2017 France will also fall behind the growth of the Eurozone, which has been the trend since 2014. The agency’s expectations are for a 2.4% growth in the economy of the currency union last year. Even if that is true, the gap is declining, with some analysts predicting that it will shrink further in 2018.
This will be reflected in the plans of Emmanuel Macron’s new government for reform. The authorities are currently working with trade unions and businesses to introduce changes in the vocational training sector, and in the coming months they will focus on unemployment insurance. Finance Minister Bruno Le Maire plans a new economic law this spring, aimed at lightening business and improving payroll schemes.
According to Bruno Le Maire, the economic expansion in 2017 is on a broad basis, including exports and investment, as well as consumer spending. He predicts the positive trend to maintain this year as well.