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02 April 2007

EZA 783 Report: France - Outlook




France: Economy


Poor economic outlook and muted reform prospects in the run-up to key elections GDP to grow at 2.0% in 2007 as last year, continuing under performance of the Euro area. Cyclical upswing in private consumption artificially boosted through income tax cuts; but real income growth also accelerating to 2.6% this year. Investment activity losing steam in most sectors – with 3% y/y growth, one percentage point below 2006. Competitiveness remains a key issue, both for export performance and in the current policy debate in the run-up to key elections.

Asset conclusions: depending on election outcome; Sarkozy - stocks should benefit in general and construction and capital related stocks in particular, Royal or Bayrou - more emphasis on consumer stocks.



© Graham Bishop

Documents associated with this article

EZA783.pdf


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