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Economic situation

Published on August 8, 2013
Communiqué issued by the Ministry of the Economy and Finance

Paris, August 7, 2013

Pierre Moscovici notes new, encouraging signs of recovery

Pierre Moscovici, Minister of the Economy and Finance, notes encouraging signs for the economic situation in France and the rest of the Euro Area.

In the Euro Area, the economic situation seems to be stabilizing, as shown by the marked upturn in [the results of] European business surveys and the slowing decline in activity in the second quarter in Spain (-0.1% after -0.5%) and Italy (-0.2% after -0.6%). Concurrently, industrial production in Germany picked up strongly in that quarter (+2.8%). Consequently, after six consecutive quarters of declining activity, the Euro Area as a whole should thus have returned to growth in the second quarter of this year.

In order to turn this gradual improvement in 2013 into a sustainable recovery in 2014, Pierre Moscovici stresses the importance of coordinating economic policies within the Economic and Monetary Union, which requires fiscal and competitiveness policies and policies of support for domestic demand that take into account each member state’s economic and external situation.

In France, the latest business surveys by INSEE [National Institute of Statistics and Economic Studies], the Bank of France and the Institut Markit confirm the improvement – still to be extended – of the business climate in industry and market services, particularly given the good state of exports and household expenditure. In July the industry index PMI (an Institut Markit survey of purchasing managers) reached its highest level since February 2012, and it has experienced its strongest three-month progression since the end of 2009. These indicators suggest that economic activity in France made progress in the second quarter, after two quarters of slight decline. The Bank of France is counting on still modest growth of 0.1% for the third quarter, a cautious estimate reflecting the uncertainty of the present situation.

The government’s strategy to ensure these signs of recovery become stronger over the coming months is based on three pillars: Europe, which must put growth back at the heart of its policies; restoring confidence, which requires that every instrument be deployed for employment, particularly youth employment, that our social model be consolidated and that people be given a new taste for entrepreneurship; and preparing the future, which – without prejudice to the restoration of financial equilibrium – requires an ambitious strategy for investment, innovation and competitiveness./.

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