IMF: French economy to expand by 0.9 percent this year, 1.3 percent next year

(MENAFN) According to the International Monetary Fund (IMF), France's economy is projected to grow by 0.9 percent this year and by 1.3 percent next year. In its Staff Concluding Statement from the 2024 Article IV Mission, the IMF noted that while the recovery may be slowing down in 2023, the French economy has shown a degree of resilience against financial tightening and reduced external demand from the euro area.

The IMF's analysis suggests that France's economic growth is expected to gradually align with its potential growth rate of 1.3 percent over the medium term. The institution reported that real GDP increased by 1.1 percent in 2023, driven primarily by net exports, even as consumer spending remained relatively weak.

Inflation trends have also shown improvement, continuing to decline since reaching a peak in early 2023. This decrease has occurred despite some fluctuations caused by the unwinding of energy support measures and delayed wage adjustments. The IMF projects that headline inflation will reach 2.3 percent in 2024 and is expected to return to the target level in the first half of 2025.

However, the IMF cautioned that political fragmentation and uncertainty regarding policies could hinder fiscal consolidation and reform efforts, which in turn may negatively impact public confidence and the overall state of public finances.

MENAFN14072024000045015839ID1108436428