France must lower labor costs, open up regulated professions, deepen its labor and business reforms and cease tax hikes to get back to growth and bolster competitiveness, the IMF said on Tuesday.
A day after slashing its growth forecast for Germany, the International Monetary Fund said that France was set to contract slightly more than its current forecast and that unemployment would keep rising in spite of the government’s promise to reverse the jobless trend by year-end.
“The number of reforms initiated in the last six months speak well of the government’s understanding that France needs to be reformed,” the IMF’s Mission Chief for France, Edward Gardner, said, adding: “It’s a first step in a long process.”
The Fund urged France to remove constraints on housing construction and push for more negotiations at enterprise level. It also suggested giving the competition authority more power to review all sectors of the economy and push to remove regulatory obstacles.