READ full country note (PDF)
Economic growth is set to return to a solid pace of close to 2% over 2018-19 thanks to strong external demand and robust business confidence. Gradual corporate tax cuts and supportive financing conditions will underpin business investment growth. Lower labour taxes and labour market reforms should encourage job creation and boost household consumption and inclusiveness. Inflation is projected to pick up, supported by the firming of the economy and an increase in wages.
The fiscal stance is projected to be broadly neutral. High growth, lower wage and housing subsidies, as well as tighter controls on sub-central government spending, should broadly compensate a decline in household and business taxes. However, further cuts in non-priority spending and an improved effectiveness of social expenditures and infrastructure investment will be needed to sustainably finance lower taxes. At the same time, medium-term growth will depend on continuing to implement structural reforms to improve skills, reduce labour market segmentation and raise competitive pressures in services sectors.
Economic Survey of France (survey page)