2024-12-17 20:10:00
Bad news for the future government. France’s unemployment rate is expected to rise from the current 7.4% to 7.6% of the active population by mid-2025, with insufficient job creation to offset the rise in the active population, a INSEE.
“In the fourth quarter of 2024 and in the first half of 2025, especially following the pension reform, the active population is expected to continue to increase,” indicates the National Institute of Statistics in its economic note.
The political situation, a source of unknowns
INSEE recalls that the employment rate (69.1%) continued to increase, reaching the highest level in the third quarter of 2024 since the institute began measuring it in 1975. The deterioration of the economic situation is expected it will also push unemployment up. “By mid-2025, the private sector would begin to destroy salaried jobs, particularly apprentices, and employment is expected to slow significantly in the public sector,” according to INSEE. “In total, the French economy would create 40,000 jobs in three quarters, mainly non-wage jobs. This rate would be insufficient to absorb the increase in the active population,” continues the institute.
The note also specifies that these forecasts do not include the “uncertain” effects on the unemployment rate of the RSA reform, the generalization of which from 1 January will lead to the automatic registration of 1.2 million additional beneficiaries with France Travail. This automatic registration is not sufficient in itself to make RSA recipients job seekers under the International Labor Office (ILO), but “listening to France Travail’s advice” could land them in this category.
Finally, INSEE underlines that “the political situation and its consequences on the budget remain a source of unknowns”. The institute “has put forward the hypothesis of renewing the taxes in 2025 according to the tariffs in force on the revenue side, and the services voted in 2024 on the expenditure side”. Its economic report therefore does not take into account the effects on employment of any budgetary restrictions that might be adopted.
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