World Economy

French Growth Slows

French Growth SlowsFrench Growth Slows

France’s recovery slowed in the fourth quarter as terrorist attacks kept tourists away and discouraged consumers from spending.

Gross domestic product grew 0.2% in the final three months of 2015, national statistics office Insee said in a statement on Friday. That matches the prediction of economists in a Bloomberg survey and compares with 0.3% in the previous quarter.

Households held off spending and companies including Air France-KLM Group and hotelier Accor reported reduced demand in the wake of the Nov. 13 attacks that killed 130 people in and around Paris. While France still recorded its strongest expansion since 2011, the weak fourth quarter will make the government’s target of 1.5% growth in 2016 harder to achieve.

Household spending, which accounts for 55% of the economy, fell 0.4% in the quarter, a decline that was cushioned by a 0.4% increase in government expenditure. Corporate investment also posted its strongest quarter of the year with a 1.3% gain.

The eurozone’s second-largest economy continues to lag its neighbors. Growth was 1.1% in the full year, compared with 1.7% in Germany and 2.2% in the UK.

“Like previous reforms, they do not in themselves address the structural inflexibility in the labor market,” Fitch Ratings said in a note Jan. 20.

  3.5m Out of Work

France set a new record for joblessness in 2015, with 3.59 million people actively looking for work, the labor ministry said Wednesday, AFP reported.

The figure jumps to 5.48 million when part-time workers looking for full-time jobs are included, also a new high, the ministry said.

With more than 10% of France’s workforce unemployed, President Francois Hollande declared last week that the nation faces an “employment emergency.” Critics, including rating companies and the European Commission, say the Socialist leader’s plan to address the situation fails to do enough to fix the underlying problems that are holding back job creation and growth.

However, last year’s 2.6% increase in job seekers was the smallest rise since 2010, it said.

Unemployment among youths under 25 years of age decreased last year by 4% over 2014, while joblessness among the over 50s jumped 8.4%.

Figures for the long-term unemployed worsened, with 2.47 million people on the books for more than a year, a 9.5% increase over 2014. The average time spent formally looking for work was 19 months, the ministry said.

Hollande this month announced €2.0 billion in measures to tackle what he called a “state of economic emergency”.