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Economic Overview

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

France is ranked as the world’s seventh largest economic power, just behind the United Kingdom and India. The country’s recovery from the 2008 economic crisis has come later than in other European countries and remained fragile due to structural imbalances. In 2020, due to the COVID-19 pandemic, France suffered one of the sharpest economic contractions among EU countries (-8%), but the economy started to recover in 2021. According to IMF estimates, GDP growth amounted to 6.3% in 2021, driven by public support and by solid private sector led investment. Growth is expected to moderate to 3.9% in 2022 and 1.8% in 2023, subject to continued containment of COVID-19, normalization of supply chain difficulties, and a continued accommodative policy environment (IMF).

In 2020, France was among the most affected countries from the COVID-19 pandemic, but the economy started to recover in 2021 thanks to expansive fiscal support and effective containment of the virus (IMF). The large emergency support package adopted in 2020, which focused on supporting households and firms by preserving jobs and providing liquidity, was increased in 2021 in the context of the third partial lockdown. The total envelope for crisis and recovery measures for 2020–22 amounted to 28% of the country’s GDP (IMF). As a result of these support measures and falling revenues, budget deficit further increased to -7.5% GDP in 2021, and is forecast to decrease but remain at a high level in 2022 (-4.6% GDP) and 2023 (-3.9% GDP) (IMF). Public debt, which was already one of the highest in the Eurozone, soared to 115.8% GDP in 2021, and is forecast to stay very high in 2022 (113.5% GDP) and 2023 (114.6% GDP). Due to spike in energy prices and supply chain bottlenecks, inflation increased from 0.5% in 2020 to 2% in 2021 (IMF). It is expected to drop to 1.6% in 2022 and 1.2% in 2023 (IMF). The priorities for 2022 will include the continuation of the implementation of the Plan de Relance designed to support French businesses, minimise the rise in unemployment, and facilitate the green and digital transitions. The France 2030 plan will aim at boosting critical innovation and investment. In addition to the risk posed by a prolongation of the health crisis into 2022 due to increasingly virulent new strains of the virus and waning vaccine effectiveness, France faces structural challenges: high structural unemployment, weak competitiveness, and high public and private debt burdens. High unemployment rates, especially among youth, remain a growing concern for policymakers.

Unemployment rate, which was declining before the pandemic, reached an estimated 8.1% in 2021 and is expected to increase to 8.3% in 2022 before declining to 8% in 2023 (IMF). The deployment of short-time work scheme limited large-scale employment losses. Social mobility remains low and the employment rates of many disadvantaged groups are poor.

 
Main Indicators 20202021 (e)2022 (e)2023 (e)2024 (e)
GDP (billions USD) 2.002.002.002.002.00
GDP (Constant Prices, Annual % Change) -7.96.82.50.71.6
GDP per Capita (USD) 4045424244
General Government Balance (in % of GDP) -5.7-5.1-4.5-4.8-4.3
General Government Gross Debt (in % of GDP) 114.7112.6111.8112.5113.5
Inflation Rate (%) 0.52.15.84.62.4
Unemployment Rate (% of the Labour Force) 8.07.97.57.67.5
Current Account (billions USD) -47.3610.60-35.09-42.34-34.39
Current Account (in % of GDP) -1.80.4-1.3-1.5-1.2

Source: IMF – World Economic Outlook Database , October 2021

Note: (e) Estimated Data

Country Risk

See the country risk analysis provided by La Coface.

 

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Main Sectors of Industry

France is the largest agricultural power in the European Union, accounting for one-fourth of the EU’s total agricultural production. Nevertheless, the agricultural sector only represents a very small part of the country's GDP (1.6%) and employs 3% of the population (World Bank). French agricultural activities receive significant subsidies, especially from the European Union. Wheat, corn, meats and wine are France's main agricultural products.
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 16.4% of GDP and employs a fifth of the active workforce (World Bank). The key industrial sectors in France are telecommunications, electronics, automobile, aerospace and weapons.

The tertiary sector represents 71.2% of the French GDP and employs 77% of the active workforce (World Bank). France is the leading tourist destination in the world with a record of 91 million foreign visitors in 2019. The discovery of the cultural and gastronomic heritage of France and shopping are the main activities popular with foreign tourists.

In 2020, due to the COVID-19 pandemic, the lockdown measures caused an unprecedented loss of activity in virtually all sectors. The most sharply impacted include tourism, automobiles, transport and aerospace, while the agri-food and pharmaceuticals sectors have been resilient. Despite the persistence of the pandemic, most sectors started to recover in 2021. Sales in aeronautics were up 24% in Q2 2021 compared to Q1 2021 (Coface), and tourism growth was estimated at 35% pour 2021 (WTTC).

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 2.5 20.4 77.0
Value Added (in % of GDP) 1.6 16.4 71.2
Value Added (Annual % Change) -0.1 -11.2 -7.4

Source: World Bank - Latest available data.

 
Monetary Indicators 20162017201820192020
Euro (EUR) - Average Annual Exchange Rate For 1 USD 0.940.890.850.890.88

Source: World Bank - Latest available data.

 

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Foreign Trade

France is a major actor in global trade. It is the world's ninth exporter and seventh importer of merchandise (WTO, 2020), and trade represents 58% of the country's GDP (World Bank, 2020). France exports essentially aircrafts, vehicles, pharmaceutical products, food products (wine), hydrocarbons and electronic components. The country imports many consumer goods, vehicles, hydrocarbons and pharmaceutical products. After collapsing in 2020 due to the COVID-19 pandemic, trade volumes rebounded in 2021. According to IMF data, the volume of exports of goods and services increased by 7.5% compared to 2020, and the volume of imports increased by 8%. The IMF expects the volume of exports to continue increasing in 2022 (+7%) and 2023 (+4.5%), at a slightly faster pace than imports, which are forecast to increase by 6% in 2022 and 3.5% in 2023.

France's main trade partners are the European Union (Germany being the 1st customer and supplier), the United States and China. The departure of the UK from the EU (Brexit) raises many questions and may lead to a reorganisation of trade relations. The UK is currently France’s 6th customer and 8th supplier.

France registers a strong structural trade deficit. While the goods balance is structurally in deficit as the country is a net energy importer, the services balance is in surplus thanks to tourism revenues. According to WTO data, in 2020, France exported goods with a total value of USD 488.4 billion, while it imported them for a total value of USD 582.6 billion. As for the services, France exported around USD 245 billion worth services in 2020, while it imported services for the total value of USD 231.6 billion. Since 2015, the balance of goods and services excluding energy has become negative, as the deficit in manufactured goods continues to widen, mainly due to the relocation of automobile production and investment in imported machinery. Imports are developing quickly, as the French population buys a substantial amount of imported goods, which are sold at cheaper prices on the local market compared with products that are 'Made in France'. Despite the government's efforts to favour innovation, French exports have a relatively low added value. In 2020, the trade deficit excluding services reached USD 71.3 billion  (World Bank, 2020). According to the latest data published by INSEE (Points de Conjoncture, December 2021), in 2021 exports of goods and services increased by 8.4% compared to 2020, while imports increased by 6.5%. If the aeronautics sector remained affected by the air transport crisis, cosmetics, leather goods and wines and spirits experienced a solid recovery in the first half of 2021, driven by the Chinese and American demand (Coface).

 
Foreign Trade Values 20162017201820192020
Imports of Goods (million USD) 573,022618,649676,441654,658582,564
Exports of Goods (million USD) 501,263535,189582,222570,951488,372
Imports of Services (million USD) 235,679245,329273,593269,940231,587
Exports of Services (million USD) 236,760273,953302,272293,569244,998

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20162017201820192020
Foreign Trade (in % of GDP) 61.163.064.464.157.8
Trade Balance (million USD) -35,747-51,541-57,411-52,568-71,279
Trade Balance (Including Service) (million USD) -13,239-23,499-28,339-28,451-56,749
Imports of Goods and Services (Annual % Change) 2.94.53.12.3-11.9
Exports of Goods and Services (Annual % Change) 1.84.44.51.6-15.8
Imports of Goods and Services (in % of GDP) 30.932.032.732.529.9
Exports of Goods and Services (in % of GDP) 30.230.931.731.627.9

Source: World Bank ; Latest available data

Foreign Trade Forecasts 2022 (e)2023 (e)2024 (e)2025 (e)2026 (e)
Volume of exports of goods and services (Annual % change) 6.91.53.74.54.0
Volume of imports of goods and services (Annual % change) 6.71.63.23.73.6

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
France is a member of the following international economic organisations: ICC, European Union, WTO, European Economic Area, G-5, G-7, G-8, G-10, G-20, IMF, OECD, among others. For the full list of economic and other international organisations in which participates France click here. International organisation membership of France is also outlined here.
Free Trade Agreements
The complete and up-to-date list of Free Trade Agreements signed by France can be consulted here.
 

Main Partner Countries

Main Customers
(% of Exports)
2021
Germany 14.0%
Italy 7.9%
Belgium 7.6%
Spain 7.4%
United States 7.0%
See More Countries 56.0%
Main Suppliers
(% of Imports)
2021
Germany 16.8%
Belgium 10.7%
Netherlands 8.9%
Italy 8.3%
Spain 7.8%
See More Countries 47.5%

Source: Comtrade, Latest Available Data

 

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Political Outline

Current Political Leaders
President : Emmanuel Macron (since 14 May 2017; re-elected for a second term on 24 April 2022)
Prime Minister: Élisabeth Borne (since 16 May 2022)
Next Election Dates
Presidential elections: April 2027
Senate: September 2023
National Assembly: June 2022
Current Political Context
Since his victory in the April 2017 presidential elections over Marine Le Pen (Rassemblement National, far right), President Emmanuel Macron and his centre-liberal party, La République En Marche (LaREM) have embarked on a vast reform program, aimed at making the labor market more flexible. However, the program to reform the pension system (abolition of special regimes), triggered a large-scale national strike. Since 2020, the  political context was particularly affected by the Covid-19 pandemic. The government supported activity via a EUR 100 billion (4% of GDP) recovery plan. The regional elections of June 2021, characterised by a low turnout of less than 35%, produced a clear defeat for Le Pen and Macron’s parties, and clear wins for incumbents from the traditional parties the Republicans (LR, right) and the Socialist Party. Nonetheless, as the polls predicted, the 2022 presidential elections resulted in a duel between Macron and Le Pen, amid failed attempts to unify the left. In April 2022, Macron was re-elected for an additional 5-year term, but abstention reached a 50 year record, and Le Pen managed to gather 41.46% of the votes. Criticised for its slow COVID-19 vaccination rollout at the beginning of the crisis, France presented one of the highest vaccination rate of the EU in 2021. The question to transform the COVID-19 health pass into a vaccine pass stimulated a debate.

On the international scene, the president intended to strengthen the integration of the euro zone by revitalizing the Franco-German partnership; defend the fight against climate change; and promote a more uninhibited relationship between France and Africa as illustrated by the formalization of the end of the CFA franc and the France-Afrique summit in October 2021. Perceived as a disruptor making unilateral statements without prior consensus with the EU, Macron moved closer to Syria, vetoed the accession to the EU of Albania and Macedonia, and criticized the weakness of NATO. Among Macron’s priorities for the French Presidency of the Council of the EU are a reform of the visa-free Schengen travel zone, migration and Europe’s history.
Main Political Parties
- The Socialist Party (PS): centre-left
- The Republicans: centre-right
- En Marche: centre, new liberal political movement founded by Emmanuel Macron
- National Rally (RN): far-right; first parliamentary representation in 1997 and gaining support amid growing voter scepticism towards the EU
- The Left Front (FDG): left to far-left
- The Democratic Movement (MoDem): centrist
- Europe Ecology - The Greens (EELV): emphasises ecology and peaceful and sustainable lifestyles
- La France Insoumise (Unbowed France) (FI): far-left
- French Communist Party (PCF): communism, soft euro-scepticism
Executive Power
The President of the Republic is the Head of State. He/She is elected by direct universal suffrage for five years. He/She appoints the Prime Minister and his/her Government at the suggestion of the Prime Minister. The Prime Minister sets the amount of the State's expenses and revenue, and prepares some bills.
Legislative Power
The parliament is composed of the Senate and the National Assembly. The 348 senators are elected by indirect universal suffrage for nine years, renewable by a one-third majority vote every three years. The 577 deputies (MPs) are elected by direct universal suffrage. They examine bills and private bills successively, vote laws and monitor the Government. The economic, social and environmental council has an advisory function (optional or compulsory) within the framework of the legislative process.
 

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COVID-19 Country Response

COVID-19 epidemic evolution
To find out about the latest status of the COVID-19 pandemic evolution and the most up-to-date statistics on the COVID-19 disease in France, please visit the French government platform with the official data. Official information on the progress of the epidemic in France is consolidated by Santé publique France. The agency provides a daily epidemiological update, which includes key national figures. Further details on the epidemic is available on the government’s data platform.
For the international outlook you can consult the latest situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.
Sanitary measures
To find out about the latest public health situation in France and the current sanitary measures in vigour, please consult the French government platform Info Coronavirus COVID-19 including the up-to-date information on the containment measures put in place and public health recommendations.
Travel restrictions
The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.
The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.
Import & export restrictions
For the information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports, if applicable), please consult the portal of the French Directorate-General for Customs and Indirect Duties.
For a general overview of trade restrictions due to COVID-19 pandemic, please consult the section dedicated to France on the International Trade Centre's COVID-19 Temporary Trade Measures
webpage.
Economic recovery plan
For the information on the economic recovery scheme put in place by the French government to address the impact of the COVID-19 pandemic on the national economy, please visit the website of the French Ministry of the Economy. Further information on the economic emergency measures is available here.
The information on the EU’s economic response to COVID-19 and the actions to minimise the fallout on the EU member states’ economies of the COVID-19 outbreak is available on the websites of the European Council.
For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the French government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to France in the IMF’s Policy Tracker platform.
Support plan for businesses
For the information on the local business support scheme established by the French government to help small and medium-sized companies to deal with the economic impacts of the COVID-19 epidemic on their activity, please consult the portal of the French Ministry of Economy and Finance Coronavirus COVID-19: Business Support Measures (in French).
For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the OECD's SME Covid-19 Policy Responses document. You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.
Support plan for exporters
To find out about the support plan for exporters put in place by the French government, please consult the support plan for French exporting companies available (in French) on the French Ministry of the Economy website. The "Support plan for French exporters" is also available in English on the French Treasury Department (DG Trésor) website.
 

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