French growth highest in six years, but who can claim the credit?

French President Emmanuel Macron visits the Michelin Ladoux Research and Technology centre on 25 January
French President Emmanuel Macron visits the Michelin Ladoux Research and Technology centre on 25 January REUTERS/Thierry Zoccolan/Pool

France experienced its highest growth in six years in 2017, official statistics released on Tuesday showed. The government was quick to claim a Macron effect, although members of the previous government claimed the credit was theirs and the figure was slightly lower than growth for the eurozone as a whole.


French GDP grew 1.9 percent last year, according to the Insee official statistics institute, up from 1.1 percent in 2016 and the biggest rise since 2011.

Consumer spending grew 1.3 percent, despite slowing down in the third quarter.

Exports rose 3.5 percent, compared just 1.9 percent in 2016, but, with imports rising 4.3 percent, the balance of trade remained negative, knocking 0.4 percentage points off GDP, according to Insee.

Government claims credit

"This is the result of a return of households' and businesses' confidence since the election of the president of the republic [in May 2017], the reform measures introduced by the government as well as a favourable international environment, in particular in the eurozone," Economy Minister Bruno Le Maire declared after the figures were announced.

He predicted that the good economic news would continue in 2018.

But Socialist Stéphane Le Foll, who was spokesman for the previous government, claimed that "all the measures that are having a concrete effect today are measures that were taken by [previous president] François Hollande".

Le Maire "said himself that the reforms he has undertaken since the summer will have an effect in two years", Le Foll pointed out.

Eurozone growth higher

President Emmanuel Macron has repeatedly declared that "France is back" and the figures show a narrowing of the gap with German growth, which was 2.2 percent in 2017.

But overall eurozone growth is higher than that in either country - at 2.5 percent, according to the EU's Eurostat or 2.2 percent, according to the European Commission.

So, while tax cuts and labour reforms by both the Hollande and Macron governments may or may not have had an effect, the principal cause of growth would seem to be a rise in demand, especially outside France.

That has led to a rise in investment - up 4.3 percent for companies and 5.1 percent for households, more than double the figure of the previous year.

Most of the rise in household spending was on construction, which was up 5.1 percent, automobiles and technological devices, while demand for more modest purchases such as food and other daily necessities actually went down in December.

French domestic demand is expected to remain robust in 2018, notably because of major public investment in the Greater Paris transport project.

Unemployment remains high

But the growth has so far failed to make a serious dent in France's unemployment rate, which remains stuck at 9.7 percent, according to the employment service, a contrast to the eurozone's fall from 9.6 percent to 8.7 percent.

Despite the fact that 250,000 jobs were created - many of them well-qualified, full-time posts - some 130,000 new people came onto the job market and there was little let-up for the unskilled, the long-term unemployed and people living in rural and deprived areas.

In fact, companies do complain of being short of labour, but they need well-trained personnel and, while reforms in training are under discussion, their effect will not be seen for several years.

The government may prefer to point to the 591,000 companies set up last year - at 7.0 percent, the highest rise since 2010.

Many of these are "micro-entrepreneurs", effectively self-employed individuals rather than employers, and the fact that they are mainly in scientific and technical sectors may give Macron some hope that his "start-up nation" is starting to take off.

Another growth area is in business and management advice, which presumably finds a market among all those get-up-and-go micro-entrepreneurs.

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