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El context econòmic de França

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, October 2021

Main sectors of industry

France is the largest agricultural power in the European Union, accounting for almost one-fourth of the EU’s total agricultural production. Nevertheless, the agricultural sector only represents a very small part of the country's GDP (1.9%) and employs 3% of the population (World Bank, latest data available). French agricultural activities receive significant subsidies, especially from the European Union. Wheat, corn, meats and wine are France's main agricultural products. The number of French farms has been divided by four in fifty years: there were more than 1.5 million in 1970, whereas nowadays they are less than 400,000, with an average farm size of 69 hectares. According to INSEE, in 2023, agricultural production achieved a value, excluding subsidies, of EUR 95.5 billion: 56.6 billion in crop production and 33.2 billion in animal production. Between 2000 and 2023, there was a real-term increase of 50.9% in the gross value added at factor cost per worker, rising from EUR 30.7 billion in 2000 to 45.9 billion in 2023.

France's manufacturing industry is highly diversified; however, the country is currently undergoing a de-industrialisation process, which has resulted in the outsourcing of many activities. Industry represents 16.9% of GDP and employs almost a fifth of the active workforce (World Bank). While services dominate the French economy, industry remains crucial. Traditional powerhouses like aerospace (Airbus), automotive (Peugeot, Renault), and luxury goods (LVMH) thrive alongside food & beverage (renowned cheeses, wines) and chemicals/pharmaceuticals (Sanofi). Emerging sectors like digital industries, renewable energy, and green industries are gaining traction with government support. Competition, rapid technological change, and stricter environmental regulations pose challenges, but France's industrial sector, rich in innovation and manufacturing expertise, is well-positioned to adapt and remain a global force. According to official preliminary figures, French manufacturing output rose by 0.3% year-on-year in 2024.

The tertiary sector represents 70.7% of the French GDP and employs 78% of the active workforce (World Bank). France is the leading tourist destination in the world: the balance of payments surplus from tourism reached a record of EUR 16.5 billion at the end of November 2023. International receipts amounted to EUR 58.9 billion in the first eleven months of the year, representing a 12% increase compared to both 2022 and 2019 (data Atout France). According to the European Banking Federation, as of 2022, France had 334 banks operating within its banking industry. Four French banks are recognized by the Financial Stability Board as part of the eight Euro area Global Systemically Important Banks (G-SIBs). Financial activities constitute 3.9% of the total value added in France, with the banking sector contributing around 60% of this figure.

 
Breakdown of economic activity by sector Agriculture Indústria Serveis
Employment by sector (in % of total employment) 2.5 19.5 78.0
Value added (in % of GDP) 1.8 17.4 70.3
Value added (annual % change) 1.1 -1.1 3.7

Font: World Bank, Last available data. tableau-comtrade-note-arrondi.

 

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Indicator of economic freedom

Définition :

Note: Economic Freedom}}

Score:
65,7/100
World Rank:
64
Regional Rank:
34

Economic freedom in the world (interactive map)
Font: Index of Economic Freedom, Heritage Foundation

 

Business environment ranking

Définition :

Note: Business environment ranking

Score:
7.74/10
World Rank:
15/82

Font: The Economist Intelligence Unit - Business Environment Rankings 2020-2024

 

Country risk

See the country risk analysis provided by Ducroire.
 

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