In 2015 the French economy is expected to grow 1.1% as private consumption, manufacturing and exports improve. However, this projected growth rate remains below the forecast eurozone average of 1.4%.
The insolvency environment
Only modest insolvency decrease expected in 2015
After year-on-year increases from 2007 to 2009, the number of corporate insolvencies fell in 2010 and 2011, by 4.5% and 1.5% respectively. However, with the French economy stagnating since 2012, the insolvency trend reversed again.
In light of the modest economic rebound forecast in 2015, a meagre improvement of the insolvency environment is also expected. However, with more than 62,000 expected, the number of business insolvencies would still be more than 20% higher than in 2007.
Growth expected to pick up, but remains below eurozone average
According to the French National Institute of Statistics and Economic Studies (INSEE), real GDP grew 0.4% in 2014, making it the third straight year of subdued economic growth. Household consumption growth remained modest, while investments decreased and net foreign trade weighed down GDP growth by 0.4%. In 2015 the French economy is expected to grow 1.1% as private consumption, manufacturing and exports improve. However, this projected growth rate remains below the forecast eurozone average of 1.4%.
Consumer sentiment improving, but concerns remain
Consumer confidence has picked up since mid-2014 amid expectations of an improvement in the economy. Nevertheless, concerns remain over the labour market situation. Unemployment increased again in Q4 of 2014, and was high at 10.3% last year. In 2015 only a modest decrease is expected.
Private consumption, traditionally a major contributor to French economic growth, grew just 0.6% in 2014. However, it is forecast to increase 1.4% in 2015, boosted by decreasing consumer prices.
Industrial production expected to improve slightly
French industrial production decreased 1.0% year-on-year in 2014, but has shown signs of a rebound in recent months, bolstering hopes that overall economic growth will see some support from manufacturing. Business confidence has picked up again since the second half of 2014, but still lies below its long-term average.