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France Economic Snapshot

Economic Forecast Summary (May 2021)

Economic activity is projected to rebound by 5.8% in 2021 and 4.0% in 2022. After a weak first half of 2021, activity will strengthen as the vaccine rollout accelerates and sanitary restrictions are lifted. In addition, the drawing down of the high level of saving due to the sanitary restrictions will boost consumption as pent-up demand is satisfied. Faster global growth will raise export prospects. Improving global demand, accommodative financing conditions and government capital spending in line with the recovery plan will support investment. Still, employment will recover slowly, as the participation in the job retention schemes will decline.

Reform Priorities (April 2021)

Going for Growth 2021 - France

A slow and uneven recovery risks entrenching the initial negative distributional consequences of the COVID-19 crisis and widening inequalities of opportunities. The EUR 100 billion recovery plan targeting investment in skills and green technologies provides an opportunity to respond to some of the country’s longstanding challenges.

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2021 Structural Reform Priorities

  • Education and skills: Improve the equity and quality of education and training
  • Labour market: Reduce further labour market segmentation
  • Competition and regulation: Reduce regulatory barriers to competition
  • Environmental policy: Target more sustainable and greener growth
  • Public governance: Improve the efficiency of public finances

 

>> Going for Growth homepage

Economic Survey of France (April 2019)

Executive Summary

 

Presentation

 

Further reading

Joint effects of energy prices and carbon taxes: Evidence from France

The joint effects of energy prices and carbon taxes on environmental and economic performance: Evidence from the French manufacturing sector (February 2020)

Presentation

This study estimates the effect of energy prices and carbon taxation on firms’ environmental and economic performance. The analysis uses data on 8 000 firms that are representative of the French manufacturing sector and observed during 2001-2016. The paper shows that (i) even though a 10% increase in energy prices causes a decline in energy use by 6% at the firm level, this increment has no effect on net employment at the industry level, but it motivates a reallocation of production and workers from energy intensive to energy-efficient firms. Our conclusion calls for complementary labour market policies that minimise costs on affected workers and ease between-firms adjustments in employment.

Read the full Working Paper  | Lire le Document de travail 

Read the blog post: Carbon tax, emissions reduction and employment: Some evidence from France 

Lire le blog: Taxe carbone : quel impact environnemental et économique dans le secteur manufacturier français ?