Industrial production in France, which is Europe’s third-largest economy, unexpectedly fell in February. It is further evidence of a slowdown among the euro zone countries. The statistics office said output by French factories, utilities and mines declined by 0.5% compared with January, when it was unchanged. Economists blamed a strong euro and higher oil price. They has expected output to neither rise or fall.
Before the figures were released, Prime Minister Jean-Pierre Raffarin had said his goal of reducing unemployment below 10% this year may be set back by “several months.”
The European Commission has just cut its prediction for economic growth in France slightly from 2.2% to 2%, but said unemployment and the budget deficit should fall.
The French government is sticking to its forecast of growth between 2% and 2.5%.
Asked about Raffarin’s statement on jobs, the Budget Minister, Jean-Francois Copé, said: “This is the year when the jobless total will fall significantly. But you have to take into account the very high price of oil and the very weak value of the dollar. The Prime Minister is playing safe when he says the fall below 10% will probably be in the first quarter of next year.”
French unemployment rose in February, keeping the jobless rate at 10.1%. That is the highest it has been since January 2000, which is another sign of faltering growth.