France: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for France
IMF Staff Country Reports, January 30, 2023
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- France: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for France
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Bibliographic details
- Published: January 30, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400232336.002
Economic recovery and near-term outlook
- 2021 output rebounded by 6.8 percent and recovered to pre-crisis levels.
- IMF estimates growth at 2.6 percent in 2022 and 0.7 percent in 2023.
- Near-term risks to the outlook are tilted to the downside, dominated by possible further impacts of Russia’s war against Ukraine.
- The war in Ukraine is dampening the recovery by denting confidence and exacerbating supply-side difficulties.
- While capacity utilization remains below pre-crisis levels, labor market conditions have further tightened.
Inflation and energy-price response
- Inflation has surged but remains well-below peers thanks to energy price controls and subsidies.
- IMF projects inflation averaging 5.9 percent in 2022 and 5 percent in 2023.
- The large fiscal response to the energy price shock has cushioned the economic impact but has been described as costly, poorly targeted, and distortionary.
- The energy crisis is identified as an opportunity to accelerate the green transition through energy conservation and a faster switch to renewable energy.
Fiscal outlook and public finances
- These and other measures to support purchasing power keep the fiscal deficit elevated despite the unwinding of Covid-19 support.
- Under current policies, the fiscal deficit is expected to narrow as support is phased out and the economy recovers but will remain elevated at 4 percent of gross domestic product in the medium term.
Labor market, education, and structural issues
- Labor-market policies should ensure smooth transition of apprentices into permanent work while addressing skills shortages and inferior educational outcomes.
- Continuing structural reforms, particularly in pensions, unemployment, and product and services markets, are highlighted as essential for future fiscal health as well as better competitiveness and growth.
Key subjects and keywords (as presented)
- Subjects: Energy prices, Financial Sector Assessment Program, Financial sector policy and analysis, Inflation, International organization, Monetary policy, Price controls, Prices, Public debt
- Keywords: better-than-expected state revenue performance, Energy prices, Europe, Financial Sector Assessment Program, Global, government's proposal, HICP inflation, Inflation, pension reform plan, Price controls, service price
International Monetary Fund. France: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for France. Country Report No. 2023/056 (January 30, 2023).
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