The Organization for Economic Cooperation and Development (OECD) on Tuesday slashed its growth forecast for the French economy and said the government must take strong measures to boost competitiveness and create jobs.

The gross domestic product is now projected to grow 0.1 percent this year after stagnating in 2012. The forecast is down from 0.3 percent growth predicted in November. The economy is expected to grow 1.3 percent in 2014.

Releasing the annual economic survey for France, OECD Secretary-General Angel Gurría said "France has a unique opportunity today to implement a bold and ambitious reform strategy that will restore public finances, create jobs and boost firms' competitiveness."

OECD urged France to continue its efforts to reduce the structural deficit as planned. Public spending is very high as a percentage of GDP and needs to be reduced, to ease the tax burden in the medium term, the survey report said.

The size, complexity and instability of the tax and transfer system is weighing on the economy, and therefore require thorough simplification, it added.

Also, France must implement labor market reforms to boost job creation. Greater competition in services and rationalization of housing policies will be crucial to raise purchasing power, create jobs and enhance competitiveness, the group observed.

The survey found that unemployment is again rising steadily, and is affecting all age groups similarly. The jobless rate is seen eventually stabilizing at 11.25 percent at the end of 2013.

RTTNews