France's economy will expand fast enough in the second half of the year to halt the rise in unemployment, albeit with joblessness topping 10 percent, the national statistics office INSEE said on Thursday. In an outlook update, INSEE said it expected France to grow 1.2 percent in 2015 after an insipid 0.2 percent in 2014. Growth will be driven primarily by greater spending power and household consumption, and by higher export levels.
After a surprisingly strong 0.6 percent first-quarter rise, gross domestic product will rise 0.3 percent quarter-on-quarter in both the second and third quarters of this year and by 0.4 percent in the final quarter, to give an average of 1.2 percent for the year as a whole, INSEE predicted. The economy should by year-end be expanding at a rate of 1.6 percent, INSEE said, adding that the combination of healthier if still modest growth rates should be enough to halt the rise in the jobless rate at 10.1 percent for mainland France and 10.4 percent when overseas territories are included in the total.
"Job creation will be too limited in the second quarter to soak up the rise in the work-age population but growth should be strong enough in the second half of the year to stabilise it at 10.4 percent," INSEE forecaster Laurent Clavel said. There was even an outside change of a drop in the jobless rate if disheartened older job seekers gave up looking for work, a phenomenon noticed in the first quarter, he said. The Bank of France on June 4 predicted, like INSEE, that GDP would rise 1.2 percent this year before accelerating to 1.8 percent next year and 1.9 percent in 2017 - slightly higher than the government's own projections.
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