France sees economic downgrade before elections

By Hajer M'tiri

PARIS (AA) - France’s economy saw a minor downgrade on Wednesday, shortly before the start of the country’s two-round legislative elections due to start on Sunday.

The Organization for Economic Cooperation and Development (OECD) placed French economic growth at 1.3 percent this year, 0.1 points lower than its last economic outlook in February.

However, the OECD said the French economy will continue to strengthen and make a modest recovery at 1.5 percent in 2018 "boosted by investment and consumption".

Analysts are still waiting to see the outcome of labor reforms promised by new President Emmanuel Macron.

Catherine Mann, OECD chief economist, said it had been a challenge to form projections for the French economy because of the country's electoral calendar.

France saw a two-round presidential election on April 23 and May 7, and is bracing for decisive legislative elections on June 11 and 18.

"We need to know the reforms" before revising growth forecasts, Mann said. "When the National Assembly is elected, we will be in a better position to know the nature of the reform program."

Macron on Tuesday unveiled a set of measures aiming to reform trade and labor laws as well as cracking down on high unemployment levels.

Prime Minister Edouard Philippe has promised a summer of “intense consultations” with unions.

If respected, the first executive reform decrees would be published by September and two different bills on unemployment and pension reform would be passed during 2018.

The OECD report expects solid growth in most areas and improvement worldwide this year and in 2018.