The International Monetary Fund (IMF) has said France needs to introduce fresh economic reforms or risk being left behind by its European counterparts.
It called on the country to reduce its labour cost and halt any tax hikes in order to stimulate growth and boost its overall competitiveness.
The IMF predict France's economy will contract slightly more than it originally forecast, claiming gross domestic product would fall 0.2 per cent this year - down from the previous estimate of 0.1 per cent.
However, it estimates economic growth will be 0.8 per cent in 2014, which is slightly below its previous prediction of 0.9 per cent.
Edward Gardner, Assistant Director of IMF's European Department, praised France's tax credit reform that reduces payroll taxes for firms paying low salaries, as well as its changes to employment law that lowers the cost of firing staff.
The IMF also expects unemployment in France - which currently stands at 11 per cent - to rise.
By Claire Archer