Little hope of France’s economic growth in 2015

Main trends are strengthening: France will enjoy 0.9 percent of economic growth in 2015, up from 0.4 percent in the previous three years respectively. “Such limited rising in activity mostly results from the constrained evolution of households’ consumption (…) penalized by a high unemployment rate and the ongoing budgetary adjustment,” Crédit Agricole S.A. economist Axelle Lacan stated in an on-line video that reviewed France’s economy in 2014 and introduced her perspectives for 2015.

Total investment is still suffering from the brutal correction of the households’ investment while corporate investment keeps on deteriorating set against the backdrop of the continuing economic crisis. On the foreign trade’s front, the European environment for growth remains weak because of a “structurally degraded competition.” However some improvement could take place in 2015. The euro’s downfall will positively impact prices’ competitiveness of exports and the drop in oil prices will help turn around corporate (gross) margin.

Structural reforms will also bear fruits gradually with some acceleration in corporate investment’s spending. Low inflation will improve households’ purchasing power. Yet the issues of 2014 could endure, particularly the want of competitiveness, high unemployment and deepening public deficit. For 2015 to be a better year, economic growth and trust will have to consolidate hoping geopolitical risks won’t ruin the chances, Lacan concluded.

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