France: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for France
IMF Staff Country Reports, July 12, 2024
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- France: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for France
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Bibliographic details
- Published: July 12, 2024
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400281280.002
Economic performance and recent shocks
- Strong and timely policy response helped cushion the impact of the coronavirus disease 2019 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 amid financial tightening and weaker euro area external demand.
- 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.
Financial markets and recent developments
- 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.
Macroeconomic projections and inflation
- Growth is projected to gradually reach 1.3 percent by 2025 from 0.9 percent in 2024.
- The disinflationary process is on track:
- Headline inflation expected to reach 2.3 percent in 2024.
- Inflation expected to return to target in the first half of 2025.
Risks and uncertainty
- The outlook remains subject to high uncertainty.
- Heightened political fragmentation and policy uncertainty domestically could delay fiscal consolidation and reform efforts, weighing on confidence and public finances.
- Ongoing geopolitical and economic transitions underpin persistent downside and policy-execution risks.
Policy recommendations and structural priorities
- The French authorities should continue to advance structural reforms to support jobs and raise productivity.
- Fiscal consolidation and reform efforts should be pursued in a timely manner to restore fiscal space while accommodating rising investment needs for the green and digital transformation.
Source: France: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for France (IMF), July 12, 2024.
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