French economy to pick up but jobless at record highs: forecast

  

France's economy, the second-largest in the eurozone, will perk up slightly in the first half of the year but unemployment is expected to stay at record highs, according to forecasts. 

PHOTO: BLOOMBERG

3 Apr5:29 PM

[PARIS] France's economy, the second-largest in the eurozone, will perk up slightly in the first half of the year but unemployment is expected to stay at record highs, according to forecasts.

In estimates released late Thursday, the INSEE national statistics office said the economy would grow by 0.4 per cent in the first quarter of the year and by 0.3 per cent in the second.

The forecasts suggest there is a good chance the French economy will grow faster over the whole year than the 1.0 per cent Paris currently estimates.

"The one-per cent for 2015, seen by many as unrealistic a few months ago, now looks like the minimum," said Finance Minister Michel Sapin.

However, the more positive growth outlook will be insufficient to drive down stubbornly high unemployment in France, INSEE predicted.

The jobless rate was forecast to hit a 20-year record high of 10.2 per cent in mainland France.

Economists and the government estimate that a growth rate of around 1.5 per cent annually is required to push unemployment down.

President Francois Hollande has pledged not to seek re-election in 2017 if he does not succeed in reversing the trend of ever-increasing unemployment.

AFP