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France has implemented ambitious policy efforts to boost competitiveness and employment in recent years . However , domestic political upheaval and geopolitical headwinds , as well as potential international trading tensions , are some of the challenges that France is currently navigating .”
FRANCE IN FOCUS
We outline selected analyses of the economic outlook , as well as manufacturing perspectives , in France .
Image : Shutterstock . com .
According to the International Monetary Fund ( IMF ), despite a recovery slowdown in 2023 , the French economy remained relatively resilient in the face of financial tightening and weaker euro area external demand . Real GDP grew by 1.1 per cent in 2023 , supported by net exports . A strong and timely policy response helped to cushion the impact of the COVID-19 pandemic and the energy crisis resulting from Russia ’ s war in Ukraine .
“ Political fragmentation and policy uncertainty domestically could delay fiscal consolidation and reform efforts , weighing on confidence and public finances . External downside risks , including escalating geopolitical tensions and an abrupt global slowdown in key trading partners , could also significantly impact the outlook . In contrast , faster reform momentum in France , and at the EU level , could mitigate these risks ,” explained the IMF in July 2024 .
France ’ s economy has been resilient in the face of the COVID-19 pandemic and higher inflation ( helped by government measures that have supported businesses , jobs and purchasing power ) but public debt has risen , according to the OECD Economic Survey of France last year .
“ France has implemented ambitious policy efforts to boost competitiveness and employment in recent years . These have included cutting business taxes and reducing social contributions on low salaries , along with reforms to unemployment benefits , apprenticeships and vocational training . Future labour market policies should strengthen incentives for older workers to participate in the labour market and focus support for young people on those with low skills who face difficulties finding a job . Expanding the provision of early childcare services can allow more women to participate in the labour market ,” recommended the OECD .
Domestic politics
Domestic political upheaval and geopolitical headwinds , as well as potential international trading tensions , are some of the challenges that France is currently navigating .
France has faced considerable political upheaval over the last few months , after the dissolution of the French National Assembly in
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