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Panorama econòmic

Economic indicators

France is ranked as the world’s seventh-largest economic power, just behind the United Kingdom and India (WEF, 2022). After suffering one of the sharpest economic contractions among EU countries due to the COVID-19 pandemic, France’s economy recovered strongly. However, during the initial quarter of 2023, domestic demand stayed muted due to elevated inflation and stricter financial conditions, which offset government support initiatives and resilient wages that maintained households' purchasing ability. Domestic demand experienced a resurgence, emerging as the primary drive for growth, only from the second quarter of the year. For 2023 as a whole, the IMF estimated growth at 1% of GDP. Economic activity is expected to slowly increase over the forecast horizon, as private consumption resumes and inflation progressively decreases (to 1.3% this year and 1.8% in 2025 as per the IMF). Due to robust domestic demand, imports are anticipated to rise, leading to a negative impact on GDP growth from net exports.

Concerning public finances the net budgetary cost of initiatives aimed at mitigating the effects of high energy prices was estimated at 0.8% of GDP in 2023 , down from 0.9% one year earlier. Simultaneously, the indexation of pensions and social benefits, aimed at bolstering households' purchasing power, continued to increase public spending, while the economic deceleration was anticipated to dampen tax revenues. The general government deficit was projected to hold steady at 4.3% of GDP, with a marginal decline this year (4.1% as per the IMF) due to the withdrawal of most energy-related measures. Following a decrease to 110% of GDP in 2023 amid a robust nominal GDP growth, public debt is expected to stabilize in 2024 and 2025, although the EU Commission sees a possible rise in the upcoming future attributed to ongoing primary deficits, mounting interest expenses, and diminished nominal growth. After peaking in early 2023, inflation subsided over the course of the year, averaging 5.6%. The French government decided to extend the electricity price cap until the start of 2025. For 2024 and 2025, the IMF sees inflation at 2.5% and 2%, respectively. As per the OECD, France should implement a medium-term fiscal strategy to accelerate fiscal consolidation. A swift and comprehensive execution of the national Recovery and Resilience Plan would be beneficial, especially given its inclusion of various reforms aimed at greening the economy, facilitating digital transformation, alleviating administrative burdens, enhancing public employment services coordination, and revitalizing health strategies at both national and local levels.

In 2023, the labour market maintained its vitality. The unemployment rate stabilized at 7.2% in the second quarter of 2023, nearing its lowest level since 2008, while the employment rate soared to an all-time high of 68.6%. However, employment growth is expected to moderate due to the gradual dissipation of labour hoarding, reduced job creation from apprenticeship contracts, a return of hours worked to 2019 levels, and an increase in labour productivity. According to the IMF, the unemployment rate is projected to decrease to 7.3% in 2024 and further to 6.9% in 2025, following a rate of 7.4% in 2023. On average, France citizens enjoy a high GDP per capita (PPP), estimated at USD 58,765 in 2023 by the IMF. Nevertheless, inequalities persist and according to a study from UNICEF, 21% of French children live below the poverty line.

 
GDP Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 2,780.433,031.783,130.013,223.133,332.65
GDP (constant prices, annual % change) 2.50.90.71.41.6
GDP per capita (USD) 42,30646,00147,35948,63150,143
General government balance (in % of GDP) -4.2-4.9-4.3-4.4-4.1
General government gross debt (in % of GDP) 111.8110.6111.6112.8113.4
Inflation rate (%) 5.95.72.41.81.8
Unemployment rate (% of the labor force) 7.37.47.47.06.9
Current Account (billions USD) -56.77-22.73-18.09-17.73-15.07
Current account (in % of GDP) -2.0-0.8-0.6-0.6-0.5

Font: IMF – World Economic Outlook Database, 2016

Note: (e) Estimated data

 
Monetary indicators 20162017201820192020
Dòlar americà (USD) - Average annual exchange rate for 1 EUR 1.061.121.181.12n/a

Font: World Bank, 2015

 

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