Economic growth in France may exceed the Organization for Economic Co-operation and Development’s (OECD) 0.4 percent target this year, finance minister Michel Sapin told CNBC over the weekend.
“The last figures for the third-quarter are figures that fill me with trust. This year, France will reach the 0.4 percent [target], maybe it will actually overcome it a little bit,” he said on the sidelines of the G-20 summit.
Gross domestic product (GDP) in Europe’s second-largest economy grew 0.3 percent on quarter, a one-year high, during the July-September period. The upbeat report came after the economy contracted in the previous quarter, leading it to be dubbed the “sick man of Europe”.
Still, 0.4 percent growth is not sufficient in the long run, he warned. The OECD projects France will expand at 1 percent in 2015, which Sapin says won’t be enough to deliver tangible gains.
“Even with a 1 – 1.5 percent growth rate, which we hope for very swiftly, we will not be able to decrease unemployment and rebalance our public finances. Structural reforms and appropriate fiscal and structural policy investments are what will allow us to find in France, and in Europe, the growth rate we need to solve the crisis,” he said.
Pressure is mounting on the government to rein in the budget deficit to meet European requirements of 3 percent of GDP by 2015. The deficit is expected to be 4.4 percent of GDP this year. Job creation is also a major priority for the Hollande administration with unemployment firmly above 10 percent.