France: The following represents a general Table of Contents outline for the Country Economic Forecast. The actual report may cover any or all of the topics listed below. Highlights and Key Issues - four/five paragraphs of analysis covering the main economic and political issues contained in the subsequent Economic Overview Forecast Table showing % changes for the country - with 2 years of historical data and 4 years of forecast data for the following: Domestic demand Private consumption Fixed investment Stockbuilding (% of GDP) Government consumption Exports of goods and services Imports of goods and services Unemployment Consumer prices Current account balance (US$ and % of GDP) Government budget (% of GDP) Short-term interest rates (%) Long-term interest rates (%) Exchange rate (vs. US dollar) Exchange rate (vs. euro) Economic Overview - two pages of events-driven analysis highlighting the most recent economic activity and, where relevant, political developments of the country, detailing significant changes to Oxford Economics' forecasts Charts and Tables - covering a full range of economic developments relevant to the time period covered. These could include such topics as: Contributions to GDP growth Monthly industrial output Business and consumer confidence Unemployment rate Retail sales Prices and earnings Consumption and investment Government balance and debt GDP and industrial production Monetary policy and bond yields Background Information on the country One or two pages of text covering the main historical political and economic factors that determine the country's current position Key Facts on the country Map of the country Key political facts Long-term economic and social development - changes since 1980 Structure of GDP by output - latest year Long-term sovereign credit ratings and outlook Corruption perceptions index- latest year Structural economic indicators - changes since 1990 Destination of goods' exports -prior years - latest year Composition of goods & services exports - latest year
Recent developments have been less gloomy. In particular, the manufacturing PMI rose to its highest level for a year in May. This supports our view that the French economy, alongside the Eurozone, will stabilise during the second half of 2013. On the back of a somewhat quicker rebound than we had previously expected, we have revised our 2013 GDP growth forecast to a fall of 0.2% from -0.3% last month. However, conditions continue to point to a very slow recovery. Until unemployment starts to come down from very high levels, consumption will remain weak. But we expect further rises in unemployment this year as companies target improvements in productivity and profitability. And to the extent that high unemployment reflects restructuring in the business sector, it will be accompanied by weak investment. With profit margins at end 2012 at their lowest in about 30 years, many companies have little choice but to postpone investment other than replacement of obsolete equipment. France is one of the beneficiaries of the European Commission’s more relaxed stance on fiscal policy. The government now has an extra two years (to 2015) to reduce the budget deficit to 3% of GDP. This was already in our forecast as we thought the previous deficit objective unrealistic. This means that after significant fiscal tightening this year (of more than 1% of GDP), fiscal policy will be relaxed.