It may appear as good news for France but it is modest. The Organisation for Economic Co-operation and Development (OECD) has revised its growth forecast for the French economy upwards. This optimism is shared by the French National Statistics Office INSEE.
According to the OECD’s intermediary economic assessment, French GDP should rise by 0.3% in 2013, while the previous assessment announced a 0.3% decline over the same period.
“It’s an important reassessment, especially considering the fact that this same organization was very pessimistic in its forecasts since January 2013. I think that the recovery of the second trimester surprised everybody and played an important role on this reassessment”, says Eric Hayer, director of the French Economic Observatory (OFCE).
The OECD’s forecast is the most optimistic of all studies published so far this year on the French economy. The International Monetary Fund announced a 0.2% decline in growth and no recovery before 2014. The European Commission’s prognosis was hardly more encouraging.
But experts and observers in France remain vigilant despite these positive projections. “Many economists think that a return to growth in France is impossible without deep structural reforms”, says Hayer, adding that “we have to put this projection in perspective, given that the recession in 2012 was very strong, there should be a much quicker and much bigger rebound today."
"This slight increase will not reverse the unemployment curve,” he stressed.
Positive projections for the eurozone
The OECD also forecasts improvements in the rest of the eurozone, predicting 0.7% growth in Germany and a 1.5% rise for the UK. The OECD said that “the Eurozone in its entirety is no longer in recession”.
The European Commission's forecasts again proved to be lower, announcing a 0.4% decline of eurozone GDP for 2013.
“It was a lost year for economic recovery”, says Hayer. “We might be out of the heavy recession stage, but growth remains flat, due to the austerity shock the European economies went through. “