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PARIS , Feb. 28 (Xinhua) -- Struggling to avoid falling further behind the faster recovering European neighbors, France would reach a robust growth in 2015, vital to bring down the double digit unemployment rate, an expert at the Organization for Economic Cooperation and Development (OECD) said.
"We are perhaps slightly more confident in our projection that by early 2015 growth could be strong enough to be ... robust ," said Peter Jarrett, head of the country studies division covering France in the OECD Economics Department.
"This is unfortunately still an unlikely outcome for France in 2014. Indeed, we see no reason to change our projections ... which call for GDP to grow 1 percent this year and for the unemployment rate to edge up by a couple of tenths," he told Xinhua in an interview.
After a weak start in 2013 , the 2.8-trillion-U.S.-dollar economy pulled out of a shallow recession to grow more than forecasted to 0.3 percent. The better-than-expected performance was driven by consumer spending and investment.
Pledging to axe public spending and improve competitiveness, France aims at a target of 0.9 percent this year.
The ruling Socialists are hoping a gradual recovery will help to cut the public deficit to 3.6 percent of the gross domestic product (GDP) this year and bring it in line with European Union limits in 2015 with a gap of 2.8 percent.
"There is a reasonably high probability that the target will be achieved, even if there are risks: employment growth might be less dynamic and price inflation lower (both of which imply less in the way of tax revenues) than what the authorities assumed when they passed the budget," Jarrett said.
"However , the bigger challenge is to finance the cut in social charges and still bring the overall deficit down to the 3 percent next year as targeted. For that they will certainly have to cut spending in many areas," he added.
Looking to get Europe's main powerhouse back on track, French President Francois Hollande pledged to cut public spending by 50 billion euros (69 billion U.S. dollars) by 2017, responding to the EU-imposed belt tightening to respect its financial commitment.
With an unemployment rate expected at 11 percent in mid 2014 , the president offered 30-billion-euro cut in companies' charges to subsidize families by 2017 in return for increasing recruitments.
According to the OECD expert, Hollande reform pact is "a good start" to trim unemployment, but "the only question is how many?"
"The government just revealed that it expects the lower social charges will yield 220,000 to 300 ,000 extra jobs over a five-year horizon. That seems reasonable, but it needs to be placed in context: such a payoff would be merely about 1 percent of total employment and would reduce the unemployment rate by only around a percentage point," Jarrett told Xinhua.
Asked about the moves needed to breathe life into the liveless domestic job maket, Jarrett recommended to shift the tax burden away from labour and reducing the minimum cost of labour relative to the median.
Furthermore , he called for "a renewed focus on the education system to reduce school failure and dropping out and to further increase the autonomy of individual universities."
Adding to that, the government must lower "... regulatory barriers to competition in a large number of sectors where privileged professionals or firms are protected from competition from new entrants," the expert said.
In January, the number of people out of work in France reached a record high to more than 3.316 million , up by 0.3 percent from a month earlier, casting a doubt over Hollande's pledge to reverse a long-running rise in unemployment. (1 euro= 1.38 U.S.dollar)
Home > Home DecoratingPurchase superior quality chandelier for home office in Australia!
Posted by robin129 in Home on October 20th, 2015
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