France’s budget deficit narrowed last year but unemployment hit a new record, highlighting the patchy recovery of the eurozone’s second-largest economy a year before presidential elections.
Michel Sapin, finance minister, said the deficit was 3.5 per cent of gross domestic product in 2015, better than the expected 3.8 per cent. Growth is expected to accelerate this year, to 1.5 per cent, after 1.2 per cent in 2015, he said.
“We ensured in 2015 a deficit reduction that was compatible with a return to growth,” Mr Sapin said on Friday. “We will continue in 2016 and 2017 to reduce deficits while also funding our priorities, by decreasing taxes and solidifying growth and employment.”
The positive developments put Paris in line to meet the eurozone’s 3 per cent self-imposed limit by 2017, as planned, which would bring to an end several years of confrontation with the European Commission over budgetary discipline. Public spending only grew by 0.9 per cent last year, Mr Sapin said, allowing public debt to stabilise at 95.7 per cent of GDP.
But France’s efforts were tarnished by jobless figures rising to a new high. The number of French jobseekers rose 1.1 per cent in February compared with the previous month, to 3.59m, the labour ministry said on Thursday.
It is the largest increase since September 2013, after a small dip in January that had raised hopes of a decrease in the stubbornly high unemployment rate of 10 per cent of the workforce this year.