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'Spectacular': French economy grows by record 7 percent as unemployment plunges

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AFP/The Local France - [email protected]
'Spectacular': French economy grows by record 7 percent as unemployment plunges
The French economy has bounced back from a terrible 2020 engendered by the Covid-19 pandemic. (Photo by JOEL SAGET / AFP)

There was positive news for France this week as new figures revealed the economy smashed a 52-year-old growth record to bounce back from the pandemic-induced recession and the jobless has rate dipped to its lowest level in almost a decade..

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French GDP grew by 7 percent in 2021 - a growth rate not reached in 52-years, according to the National Institute of Statistics and Economics

"It is spectacular," said French Economy Minister Bruno Le Maire in an interview with France 2 on Tuesday.

This figure is proof of a strong economic recovery following a disastrous 2020 during which the economy contracted by 8 percent. 

The overall size of the economy was greater in the fourth quarter of 2021 than it was in 2019, prior to the pandemic.

A graph from INSEE shows French GDP overtime

A graph from INSEE shows French GDP overtime. Source: INSEE

The bounce-back has been largely attributed to greater household spending.

"It proves that the government's economic programme is effective," said Le Maire.

The other good news is that unemployment is at its lowest level in almost a decade. 

At 3.3 million on average in October-December, unemployment was at its lowest level since the summer of 2012, according to labour ministry figures.

A 12.6 percent fall compared with the same period in 2020 more than made up for the joblessness surge during the first year of the global Covid-19 pandemic.

"It seems like business chiefs are happy to hire whatever happens, and don't give the impression of unease you'd usually have on the way out of a recession or a crisis," commented Philippe Waechter, chief economist at Ostrum Asset Management.

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Last year "was an exceptional year for jobs," Labour Minister Elisabeth Borne said on Twitter.

With France headed into an April presidential election marked by fears over inflation and purchasing power, Borne added that "our determined action for jobseekers has borne fruit".

While yet to officially declare his candidacy for reelection, President Emmanuel Macron's economic record will be especially closely scrutinised.

His 2017 platform including sweeping reforms to areas like employment law, tax and social spending, although some of those efforts stalled in the face of "yellow vest" protests and the Covid-19 pandemic.

State statistics agency Insee has nevertheless forecast economic expansion of 6.7 percent for 2021 ahead of its preliminary report on Friday, compared with an eight-percent slump in the previous year.

That would make France one of the 19-nation eurozone's top performers, buoyed by massive, pricey government interventions to limit the pandemic's impact on businesses and workers.

In recent weeks, the government has tried to limit the blow to average people's pockets from surging energy prices in Europe, including by ordering state-controlled generator EDF to sell more cut-price electricity.

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Anonymous 2022/01/28 10:55
What spectacular growth! If only 2020 hadn't happened! Thanks for helping us to imagine!
  • Anonymous 2022/01/28 11:01
    Dead cat bounce would be a more accurate description

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