France Says Expansion to Continue

The French economy can look forward to continued steady growth in 2018, thanks to a sharply improved business climate. France’s return to economic growth should remain on course in 2018, in step with its European neighbors, the national statistics agency said late Tuesday.

Citing a “buoyant” world environment, INSEE revised its growth estimate for 2017 upward from 1.8% to 1.9%. “Growth has set in since the end of 2016 at a steady rate of around 0.5% per quarter,” INSEE official Julien Pouget told a news conference, predicting that the upward trend would last through mid-2018, AFP reported.

The European Central Bank last week forecast growth for the 19-member eurozone at 2.3% for next year, a leap from its September estimate of 1.8%.

French GDP growth is driven by a sharply improved business climate, reducing dependence on household consumption. But it is well shy of EU powerhouse Germany’s forecast by the ECB at 2.6% for this year and 2.5% in 2018.

In especially good news for France’s centrist President Emmanuel Macron, French unemployment is expected to stabilize at around 9.4% by mid-2018, its lowest level since early 2012. Joblessness was a constant thorn in the side for Macron’s Socialist predecessor Francois Hollande, who failed to move the needle much below 10% during his single term in power.

Macron, elected in May, promised during his campaign to bring the rate down to 7% by the end of his term in 2022.

Meanwhile, The Economist magazine has named France as country of the year, just pipping South Korea to the title. And most of the credit goes to Emmanuel Macron.

For the last few years the UK’s economically liberal magazine has been picking its “Country of the Year”.

Up until 2017, France never troubled the judges. But then along came Emmanuel Macron.

Perhaps it’s no surprise a pro-free trade, liberal, globalization supporting magazine chose France in the year a pro-globalization, economically liberal, progressive 39-year-old became the president of a country after five years of near-stagnation under a Socialist leader.

But here’s why France beat South Korea and Argentina, according to The Economist:

“In 2017 France defied all expectations. Emmanuel Macron, a young ex-banker who had no backing from any of the traditional parties, won the presidency.

“In six months he and his party have passed a series of sensible reforms, including an anti-corruption bill and a loosening of France’s rigid labor laws.

“The struggle between the open and closed visions of society may well be the most important political contest in the world right now. France confronted the drawbridge-raisers head on and beat them. For that, it is our country of the year.”