Low oil prices and monetary easing are boosting growth in the world’s major economies, but the near-term pace of expansion remains modest, withabnormally low inflation and interest rates pointing to risks of financial instability, according to the OECD’s latest Interim Economic Assessment.
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This country note from Going for Growth 2015 for France identifies and assesses progress made on key reforms to boost long-term growth, improve competitiveness and productivity and create jobs.
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France is one of the world’s five leading economies, as measured by GDP, a position that it owes in particular to its strength in a number of knowledge-intensive sectors. Yet today, six years after the onset of the economic crisis, French growth remains weak – 0.4% this year, and at best 1% in 2015, according to the latest OECD projections.
The President of the French Republic, Mr. François Hollande, met the Heads of five international economic organisations at the OECD on Friday 17th October to discuss the challenges facing the global economy.
Full implementation of the structural reforms adopted and announced in France would boost potential annual economic growth by one third, or 0.4 percentage points per year over ten years, according to the OECD.
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Enhancing the productivity and competitiveness of the French economy will demand action on innovation and research, competition, education and vocational training, as well as on the functioning of the labour market, on public-sector efficiency, and on fiscal policy.
France enjoys levels of productivity that are among the highest in the OECD, but the unemployment rate remains considerably above the pre-crisis level, which along with a low labour force participation rate contributes to low employment.
Like many other European countries, France faces key challenges in the job market. Productivity is relatively high but growing slowly, and the economy is held back by persistently high unemployment and low participation of older workers.
OECD Secretary-General Angel Gurría strongly supports President François Hollande’s recently announced measures to revitalise the French economy and set it on a path towards stronger growth.