Reforms could boost France\\\'s GDP growth to 3.7pc in 10 years: OECD
Saturday, 18 October 2014
PARIS, Oct 17 (AFP) : France could double its economic growth this year and turnaround its moribund economy in a decade by implementing the government's planned administrative reforms, the OECD said on Friday.
Such changes could add 0.4 per cent to economic output every year over the next ten years, pushing up gross domestic product (GDP) 3.7 per cent in a decade, the Paris-based group representing 34 rich countries said.
"To put the French on the path to stronger growth, but also more inclusive, requires the reinforcement of structural reforms started in 2012," OECD Secretary General Angel Gurria said in a statement with the report, which was to be given to President Francois Hollande later on Friday.
France's economic growth has sunk into the doldrums this year, held back by near record unemployment and the government's huge pile of debt, which has put it on a collision course with the EU.
Finance Minister Michel Sapin at the beginning of the month predicted France would grow by only 0.4 per cent this year, recovering to 1.0 per cent in 2015, 1.7 per cent in 2016 and 1.9 per cent in 2017.
Paris also predicts its budget deficit -- the shortfall between revenue and spending -- will hit 4.3 per cent of annual economic output next year and only fall to the EU's debt ceiling of 3.0 per cent in 2017, instead of next year as it had previously promised.
That has put it at loggerheads with the European Commission, the EU's executive arm, which many expect could demand Paris modify its 2015 budget to bring it in line with rules governing the 18-country eurozone.
To turn around its economic fortunes, France must swiftly implement Hollande's "Responsibility Pact" which would strip 50 billion euros ($64 billion) from public spending, and hand out 40 billion euros of corporate tax breaks with the aim of creating 500,000 jobs.
"In the future, these structural reforms will not only be implemented fully but also expanded, particularly to further reduce the dual labour market, rebalance funding of the pension system and rationalise public spending," it added.