French economy is still sluggish
France lags behind Germany and rest of Europe as it makes slow recovery from financial crisis
FRANCE is not making the expected bounce back from the crise, recording growth in 2010 of just 1.5 per cent, well down on Germany, which notched up 3.6 per cent.
Although the German figure was below expectations, French growth is now lagging behind the average for the rest of the eurozone, which stands at 1.7 per cent growth overall.
Economy minister Christine Lagarde, however, saw some hope in Banque de France estimates of a 0.8 per cent rise in the gross domestic product (GDP) between January and March 2011. She said it was an indication that the economy was on the rebound and should mean a two per cent rise in growth for 2011.
Her views were not shared by experts, who view the recovery so far as at best “soft”, with Xerfi economist Alexander Law saying that the end of 2010 brought “no relief”.
Household consumption grew by 0.9 per cent at the end of 2010 – up 1.6 per cent for the year – thanks in part to the prime à la casse to help the motor industry, but also because of a rise in energy usage. But it came against a background of increasing austerity measures, rising unemployment and inflation sitting at two per cent.
Industry is still in decline. After a slump of 7.9 per cent in investment in 2009, it was still 1.4 per cent down in 2010, despite a slight recovery in the final months of the year
France’s import-export balance is €51 billion in the red, its second largest deficit in the past 10 years, largely as a result of rising oil prices.
Photo: Remy Steinegger
