The OFCE anticipates a rise in unemployment in France at the end of 2023 and in 2024

In the wake of a buoyant year 2022, "during the first half of 2023, job creation remained dynamic (+172.000 jobs created) but a slowdown began in the second quarter", summarizes the French economic institute.

He estimates that the "second half of the year 2023, but especially the year 2024, would be those of the reversal of the unemployment curve, the latter going from 7,2% currently to 7,9% at the end of the next year in a context of marked increase in the working population due to the implementation of the pension reform.

“The weak growth in activity and the partial recovery of past productivity losses would be due to the strong dynamism of employment observed in recent years,” continues the OFCE.

He also estimates that 2024 “would be the year of falling inflation (3,3% on average annually and 2,3% year-on-year at the end of the year) but growth would remain modest (0,8% ) due to the full materialization of the effects of increases in key interest rates".

In its draft budget for 2024, the French government expects 1,4% growth in gross domestic product, while the Banque de France forecasts 0,9%.

“According to our assessment, the effect of monetary policy would reduce GDP growth by -0,9 points in 2024 (after -0,4 points in 2023),” writes the OFCE.

He also estimates that “despite the reduction in exceptional budgetary measures, the public deficit would remain at 4,8% of GDP in 2023 and 2024 mainly due to sluggish growth which would weigh on tax revenues”.

At the global level, the OFCE estimates that the rise in energy prices will fade by the end of 2023 but that growth will be penalized by the effects of monetary tightening which should peak in 2024. It anticipates that global growth will slow from 3,2% in 2022 to 2,3% in 2024.

This slowdown in global growth "will result in an increase in the unemployment rate in most industrialized countries", according to the OFCE.