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French economy eyes rebound but job market still lags

AFP

France’s economy is set to grow faster than expected in 2015 after three “sluggish” years, but still not fast enough to bring the unemployment rate down, the country’s national statistics institute said Thursday.

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Insee, as the institute is known, said the GDP would grow by 1.2% this year, marking a “significant acceleration” after an average growth of just 0.4% over the past three years.

The forecast is slightly rosier than the one given by the government, which is expecting 1% growth through to December.

Insee said growth would be boosted by cheap fuel, a weak euro and easy access to credit, coupled with government steps to reduce taxes on business.

The statistics bureau said the faster expansion this year will allow a stabilization of unemployment at a rate of 10.4% during the second half of the year, but will not translate into significant new hirings until the next year.

President François Hollande pledged to lower unemployment when elected in 2012. Instead, the number of people out of work has reached record highs under his tenure.

Hollande has also promised not to seek re-election in 2017 should he fail to lower unemployment before the end of his term.
 

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