France’s economic reforms do not go deep enough to halt long-term decline and may not cut unemployment from double-digit levels by the end of this decade, the International Monetary Fund has warned.
by Ambrose Evans-Pritchard, The Telegraph:
The IMF called on president Francois Hollande to slow the pace of fiscal tightening next year to avoid an economic relapse, pouring cold water on claims that a fresh cycle of healthy growth is now under way.
“Given the still hesitant recovery, the government should ease the pace of adjustment,” it said in its annual healthcheck. It warned of “significant” contagion for surrounding states if French growth stalls again.
A chorus of French economists has accused Mr Hollande of wishful thinking in proclaiming the crisis to be over. Partick Artus from Natixis said recent signs of stabilisation are largely due to restocking and should be treated with great caution. “This is not recovery,” he said.
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