French jobless rate holds steady
March 29, 2002 Posted: 6:48 AM EST
PARIS, France (Reuters) - France's jobless rate held steady at 9.0 percent in February, with the economy showing signs of picking up as leading candidates in this spring's presidential election bank on a recovery to deliver tax cuts.
The Labour Ministry said the number of unemployed dipped by 4,000, or 0.2 percent, to 2,406,000 from 2,410,000 in January, according to data based on International Labour Organisation criteria, and that the economy was poised for recovery.
"Overall, the unemployment trend has been on a plateau for three months. It's in a context of a transitional economic situation with signs of an upturn in France and abroad,'' the Labour Ministry said in a statement.
The Finance Ministry later issued a more upbeat statement.
"In France, the conditions are in place for the recovery in industry to unleash a new phase of robust growth,'' it said.
Economists, who in a Reuters poll gave an average forecast of 9.1 percent for the February jobless rate, said the slightly lower than expected headline number was a sign the economy was beginning to recover after narrowly escaping recession.
"The effect of economic recovery is starting to show, although jobless levels are still poor and will be for some time,'' said Eric Chaney, economist at Morgan Stanley.
In the real economy, too, there were signs of an improvement in the business environment.
"I think it's better than it was in January or February,'' Philippe Lapidus, who runs Paris-based start-up software company Ukantoo, said on Thursday. ``I think people are more open now.''
Both conservative President Jacques Chirac and his main rival for the presidency, Socialist Prime Minister Lionel Jospin, are banking on the economy growing at three percent a year from 2002 to 2007 to finance proposed tax cuts.
France and Germany earlier this month forecast growth in their economies, respectively the second-biggest and the biggest in the euro zone, to pick up during the course of this year to hit around three percent by year end or sometime in 2003.
In a report called "The Clouds Lift,'' French statistics office INSEE earlier on Friday gave a boost to Chirac and Jospin's predictions for a brisk pick-up, which they would each need if elected to fund billions of euros in proposed tax cuts.
INSEE raised its first-half growth forecast for France to 0.8 from 0.5 percent and said business confidence was recovering throughout Europe.
Jospin has a slight edge over Chirac in opinion polls ahead of the two-round presidential election on April 21 and May 5.
Separately, INSEE said French producer prices were unchanged in February from the month before. Economists polled by Reuters gave an average forecast for a month-on-month rise of 0.2 percent.
Economists said the only real threat to inflation was from higher oil prices.
"Energy prices and notably petrol still constitute a risk for the future,'' said Morgan Stanley's Chaney.
