## 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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## Bibliographic details
- Published: January 30, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400232336.002

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### 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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_Source: https://www.imf.org/en/publications/cr/issues/2023/01/30/france-2022-article-iv-consultation-press-release-staff-report-and-statement-by-the-528669_