France to return to weak economic recovery in 2014

France's economy will not fall back into recession, as is widely feared, according to national statistics institute, Insee, which predicts a feeble 0.4 per cent growth for the fourth quarter of this year. But there will be no let-up in unemployment, it says.

French President François Hollande Reuters/Laurent Dubrule

"Growth in France in the fourth quarter will be vigorous but the recovery will likely be shaky in 2014," Insee head Cedric Audenis said on Thursday.

Insee sees the unemployment rate remaining almost stable and rising marginally from

10.9  per cent in September 2013 to 11.0 per cent at the end of June 2014.

"I confirm that everything is in order to reverse the rise in unemployment," said French President François Hollande on Thursday.

Hollande has promised to begin bringing down unemployment by the end of 2013.

Forecasters expect about 76,000 jobs to be created but that will not be enough to offset the growth in the labour force of 113,000.

"We are almost there," commented Prime Minister Jean-Marc Ayrault on Thursday night.

Foreign demand for French products is likely to return to a sustained and regular rate of growth by mid-2014, according to Insee.

It sees the French economy growing by 0.1 per cent in the first quarter of 2014 with the rate picking up to 0.7 per cent in the second quarter.

Although it did not provide an annual growth forecast for 2014, Insee said that, if the economy posts 0.2 per cent growth each quarter, it will hit the 0.9 per cent growth that  the government's budget is based on.