PARIS (Bloomberg) — The French economy may experience a “timid recovery” in 2015 after three years of almost no growth as cheap oil lifts consumer spending, the European Commission said.
Gross domestic product is set to expand 1 percent this year, up from 0.4 percent in 2014, the European Union’s executive arm said today in a report. The forecast is higher than the 0.7 percent growth the commission predicted Nov. 4.
“Falling energy prices should improve the financial positions of households and businesses, hence stimulating activity,” the commission said. “The gradual economic recovery is set to be mainly driven by private consumption.”
The forecasts offer the prospect of economic expansion for the first time since President Francois Hollande came to power two-and-a-half years ago. Even so, the commission predicts that the growth isn’t enough to dent unemployment or improve France’s share of world export markets.
“Net exports will continue to weigh on GDP growth over the forecast horizon,” the report said. Unemployment is “expected to remain high.”
The commission predicts a French budget deficit of about 4.1 percent of gross domestic product in 2015, down from 4.3 percent in 2014.