The INSEE, in its summer economic report, has good news to share. The growth of the French GDP is expected to seriously increase this year. After a growth rate of 0.6% in the first quarter, growth could be at 0.3% in the second and third quarters, and then 0.4% for the last three months of the year.
The result is more than positive, as growth would thus be 1.2% for this year. This is slightly higher than the government’s forecast of 1%, and notably, it is the highest growth recorded by the country since 2011 — even though it is still a bit weak compared to the performance of that time. In any case, a little growth is always welcome…
As always, it is household consumption that drives GDP growth. This is expected to rise by 1.9%, largely due to the increase in purchasing power resulting from stagnant or even declining oil prices. INSEE, however, sees a significant decline in household investment at -4.7%, while corporate investment would be more contained at +1%; nonetheless, the economic recovery should have gradual effects throughout the year for this latter category.
On the corporate side, government measures will support cash flow: the responsibility pact coupled with the Competitiveness Tax Credit (Cice), as well as the decline in oil prices, will help replenish the coffers.
And what about unemployment? Such growth is likely to create (some) employment. For 2015, INSEE forecasts the creation of 114,000 jobs, with an unemployment rate of 10.4%. It is always good to take, but a previous study showed that this progression, which should be noticeable from the second half of the year, would be largely due to job insecurity: fewer permanent contracts, more temporary ones.
