Friday, August 18, 2017

Robust Growth Ahead for France

UBS is forecasting the fastest growth rate of the French economy since the crisis. If the forecast is correct, Macron will reap the benefits of the Hollande-era reforms (plus cyclical recovery stemming from inventory replenishment and pent-up consmer demand) without lifting a finger. French unemployment is also at a 12-yr low. Indeed, UBS worries that if he overexerts himself by lifting too many fingers (read: labor code reform), he could hinder the recovery just as it gets rolling. This is the only cloud the analysts see on the horizon.

This is the kind of problem every president wants to have. And yet the mood in France is once again morose, after the brief euphoria of May. A glance at the US should reveal to the French how lucky they are to have dodged the populist bullet now firmly lodged in the American spine. Courage, chers amis. You don't know how good you have it.

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