Long seen as the weakest of Europe's major economies, French GDP is expanding at its highest rate in years, with optimism underpinned by the pro-business agenda being implemented by the government.

Statistics agency INSEE said Thursday that unemployment had fallen to 8.9 percent nation-wide in the final quarter of 2017, down 0.7 percentage points to its lowest level since 2009.

The uptick in the jobs market has led some companies to warn about skills shortages, a dramatic turnaround for an economy that has consistently lagged its better performing neighbours.

"We've had new job creation at a very high level in 2017 which was sufficient to reduce unemployment," commented economist Bruno Ducoudre at the OFCE economic institute.

On a day of bumper announcements, online giant Amazon also said that it planned to create 2,000 new jobs in France in 2018, most of them in its warehouses.

Economists stress that the improving conditions are partly down to stronger growth across Europe generally, as well as reforms launched by previous president Francois Hollande.

But the head of the International Monetary Fund emphasised Thursday the role of recent policy changes under Macron.

"We need to recognise clearly the quality and the ambition of the reforms that have been started," Christine Lagarde said on Thursday during a visit to the economy ministry in Paris.

Macron, a 40-year-old centrist elected in May, has promised a "transformation" of the economy and social system to make France an easier place to start companies and more attractive for investors.

His first annual budget cut taxes on companies and profits on financial investments, while his government is preparing a second wave of reforms focused on improving training for workers and the unemployed.

Economic growth is forecast to be around 2.0 percent in 2018, while expansion of 1.9 percent in 2017 was the highest level in six years, according to INSEE.

- Fragile president -

Tackling mass unemployment is Macron's number one priority, with joblessness a scourge for high-poverty areas around major cities and felt particularly acutely by the under 25s.

Around 20 percent of young people are out of work, according to the INSEE figures, down from around 25 percent.

Macron has promised to bring the overall unemployment level down to 7.0 percent by the end of his term in 2022, but early complaints about skills shortages underline the scale of the task.

France has high levels of long-term unemployed workers who are unskilled, making them unattractive for companies looking to take on new staff. 

A survey by INSEE in October found that half of companies in the construction sector were having difficulty finding skilled labour, while 38 percent of industrial groups faced the same problem. 

"Everything is just starting for us," Economy Minister Economy Minister Bruno commented as he played down the unemployment figures. "I think that for results, notably on the jobs front, we will need two years." 

Despite the improving economy, Macron's approval ratings remain low and volatile, with a new survey out on Wednesday showing him down five points in February to 35 percent.

This makes him less popular than his predecessor Francois Hollande at the same point in his term in office, the polling group Ispos said.

Other surveys have shown that French people are worried about their own household budgets and are not convinced that Macron's reforms will deliver improvements in their own lives.

The young president, a former investment banker, has been labelled the "president of the rich" by opponents to his pro-business agenda that has so far favoured company owners.

"I'm not obsessed at this stage whether people have confidence in me or not for their purchasing power because if someone asks you a question about it, we're all the same, we want more," Macron told reporters on Tuesday.

He ruled out the "quick response" favoured by French governments in the past which would see increased public spending or tax cuts financed by debt.

France met EU rules on its public finances for the first time in a decade last year by reporting a deficit under 3.0 percent of GDP, but the country's public finance watchdog has urged the government to go further.

"We need to decrease our debt because it makes us vulnerable to an increase in interest rates," Le Maire added on Thursday, saying that increased tax revenues generated by additional growth in 2018 would be used for this purpose. 

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