France | Economic Overview | 2013 Q1
Recent updates for the French economy indicate that stagnation is the most likely scenario ahead. The economy shrank 0.3 percent in the last three months of 2012, after 0.2 percent growth in the previous quarter. Unemployment rate at 10.6 percent has been the highest in 12 years and jobless claims have increased for 21 straight months, leaving the most people since 1998 out of work. Moreover, the high-taxes policy in connection with rising unemployment is undermining consumer confidence, which has been very low since August of 2012. More importantly, deteriorating household consumption and weak exports have been a drag on business confidence and investments. As a result, the industrial production has been declining since December of 2011. On the positive side, the French President has pledged to shrink government spending by 60 billion euros over five years, cut in payroll taxes and is ease labor regulation in a bid to improve competitiveness.
4/23/2013 8:22:00 AM