The Cedef’s Letter: News of the Week
January 17, 2025
Economic Recovery Continues at a Steady Pace
The French economy continued to recover at a steady pace in the fourth quarter of 2024, according to data released by the National Institute of Statistics and Economic Studies (INSEE).
Gross domestic product (GDP) grew by 0.5% in the fourth quarter, following growth of 0.6% in the third quarter. Annual growth reached 2.1%, slightly above the government’s forecast of 2.0%.
The recovery was driven by strong consumer spending, which grew by 0.7% in the fourth quarter. Business investment also rebounded, increasing by 0.4%.
Unemployment Falls to Pre-Pandemic Level
The unemployment rate fell to 7.5% in the fourth quarter of 2024, down from 8.2% in the third quarter. This marks the lowest level of unemployment since the COVID-19 pandemic began.
The decline in unemployment was particularly pronounced among young people and long-term unemployed. The youth unemployment rate fell from 16.5% to 14.2%, while the long-term unemployment rate fell from 5.4% to 4.9%.
Inflation Moderates, but Remains Elevated
Inflation moderated slightly in December 2024, with the consumer price index (CPI) rising by 6.2% year-over-year, down from 6.5% in November. However, inflation remains well above the European Central Bank’s target of 2%.
The government has implemented several measures to contain inflation, including tax cuts and subsidies on energy bills. However, the conflict in Ukraine continues to put upward pressure on prices, particularly for energy and food.
Business Confidence Remains Positive
Business confidence in the French economy remained positive in January 2025, according to a survey conducted by the Bank of France.
The survey found that businesses expect economic activity to increase in the coming months, and they are planning to hire more workers. However, businesses remain concerned about inflation and rising energy costs.
Cedef Welcomes Economic Recovery, but Expresses Concerns about Inflation
The Confédération des Petites et Moyennes Entreprises (Cedef), which represents small and medium-sized businesses in France, welcomed the economic recovery but expressed concerns about the impact of inflation on businesses.
“The economic recovery is encouraging news for French businesses,” said Cedef President François Asselin. “However, we are concerned about the impact of inflation, which is putting pressure on businesses’ profit margins.”
Cedef urged the government to continue implementing measures to contain inflation and support businesses. The confederation also called for reforms to the labor market to make it easier for businesses to hire workers.
La lettre du Cedef : l’actualité de la semaine
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