Page 20 - Economic report 2018

household disposable income grow 2.5% in 2019 (after an increase of 1% in 2018). These
measures, together with those presented after the Great National Debate in April 2019, will
help to maintain the increase in household disposable income until 2020.

The level of per capita GDP compared with the European average in purchasing power parity
(EU=100) has been stable at 104 for three years. This means that GDP per French inhabitant
is 4% higher than the European average and, since the start of the French economic recovery,
the level of real convergence with the EU has neither improved nor worsened. However, we
should remember that in the period 2009-2013 the level of per capita GDP reached 8% higher
than for the EU, which means that during the years of adjustments following the economic
crisis, France saw a process of divergence between the level of income per inhabitant and
the European average.

According to Insee, the GDP components that drove growth in 2018 were those of domestic
demand, which added 1.3 points to growth, despite a decrease of eight tenths against the
previous year. All components of domestic demand saw positive trends but weaker than in
2017. So, growth in private consumption slowed from 1.4% in 2017 to 0.9% in 2018, and
public consumption from 1.6% to 0.8%. Household consumption felt the effect of decreasing
job creation but showed more positive signs at the end of the year, following the budget
measures approved by the National Assembly on 21 December 2018. For the second
consecutive year, the GDP component that most drove activity was investment in 2018.
Despite slowing, investment grew 2.8%, especially business investment, which benefitted
from the improvement in the economic environment and the reforms introduced by Macron,
especially in the labour market. In contrast, family investment in housing slowed dramatically,
18

Box 2.1
EMERGENCY ECONOMIC AND SOCIAL MEASURES ANNOUNCED BY PRESIDENT
MEASURES (MUES), APPROVED ON 21 MACRON ON 25 APRIL 2019 AFTER THE
DECEMBER 2018 BY THE FRENCH NATIONAL GREAT NATIONAL DEBATE
ASSEMBLY IN RESPONSE TO UNREST ON The commitment to suppress 120,000 civil
THE STREETS service jobs in five years is withdrawn. It is
The external environment of the Andorran economy | II. The French economy
The Law that approves them contains three announced that there will be no more closures of
main measures: schools or hospitals, with no more than 24 pupils
Allowing employers to pay a bonus of up to per class in schools.
€1,000, exempt of tax and mandatory social A “significant” cut in income tax is confirmed, to
contributions, to employees who earn less than be specified by the government.
three times the minimum wage. This advantage, The revaluation of pensions under €2,000 is
called “Exceptional Purchasing Power Bonus” ratified.
had to be paid before 31 March 2019. The suppression of public holidays is rejected and
Exempting extra time from payment of certain the reform to extend the working day, currently
social contributions and income tax up to a 35 hours per week, is halted and left to collective
maximum of €5,000. bargaining in businesses.
The third measure refers to the Generalised The proposal to delay the age of retirement,
Social Contribution (CSG), which finances social currently 62, is not withdrawn.
security and unemployment insurance. For The closure of the national school for civil
retirement pensions of under €22,580 p.a. per servants (ENA) is announced.
person, or €34,636 per couple, the CSG returns
to 6.6%, the percentage applicable before being
raised on 1 January 2018.