France: Employment and job support measures

The ending of the SMEs hiring premium, the sharp cutback announced in the number of government-subsidised job contracts and the less favourable CICE tax credit contribute to slow employment growth in the near term.

An extended slowdown in 2018 is not the most likely scenario in our view.

Growth is gaining momentum, which should bolster employment. New support factors are also expected to come into play, including tax cuts and greater flexicurity measures in the job market.

In 2019, even though growth is expected to slow, we foresee another slight acceleration in employment, which should get a boost from the transformation of the CICE tax credit into a cut in employers' social contributions and from a further reduction in the cost of labour around the minimum wage level.