France risks falling behind crisis-hit Italy and Spain if it does not reform its economy, the International Monetary Fund has warned, adding to pressure on President Fran?ois Hollande to stem the country’s industrial decline.

In its annual report on the French economy, the IMF called yesterday for “a comprehensive programme of structural reforms”. Forecasting economic growth of 0.4 per cent next year – half the level projected by Paris – the IMF said the outlook was further clouded by France’s “significant loss of competitiveness”.

“[It] could become more serious if the French economy does not adapt at the same pace as its principal commercial partners, notably Italy and Spain, which, after Germany, are engaged in profound reforms of their labour and service markets,” the IMF said.