France: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for France

July 12, 2024

Preview Citation

Format: Chicago

France: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for France, (USA: International Monetary Fund, 2024) accessed September 16, 2024

Summary

A strong and timely policy response helped cushion the impact of the COVID19 pandemic and the energy crisis resulting from Russia’s war in Ukraine. Despite a recovery slowdown in 2023, the French economy has remained relatively resilient in the face of financial tightening and weaker euro area external demand. Nevertheless, the crisis response and slower-than-expected recovery have weighed on public finances, with a sizable fiscal underperformance in 2023 reducing fiscal space at a time of rising investment needs for the green and digital transformation. While financial conditions started improving in early 2024, market pressures on sovereign spreads and stock markets rose in early June following the European elections amid political uncertainty. Labor market performance has remained robust, although labor productivity remains below its pre-COVID trend. Against this backdrop, the French authorities have appropriately shifted their focus towards rebuilding buffers and achieving a sustainable modernization of the economy. The reforms of the pension and unemployment benefit systems have already started to yield results. Parliamentary elections are scheduled for June 30 and July 7. The Staff Report was completed on June 17.

Subject: Climate change, Environment, Labor, Labor markets, Public debt

Keywords: Climate change, Climate transition risk, Europe, Global, Government projection, Headline inflation, Labor market performance, Labor markets, Liquidity managements tool, Policy uncertainty, Resilience to shock, Single market, Solvency requirement, Stability program, Unemployment benefit reform

Publication Details

Pages:

78
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2024/216
Stock No:

1FRAEA2024001
ISBN:

9798400281280
ISSN:

1934-7685

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