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Economic and political overview

Economic Overview

France is ranked as the world’s seventh-largest economic power (IMF, 2024). In 2024, France's GDP grew by 1.1%, matching 2023's rate. Household investment dropped 6% due to high interest rates and low confidence, following an 8.2% decline in 2023. Business investment fell 1.6% amid low capacity utilization and weak demand. Growth was driven by public consumption (+2.1%) and public investment (+3.3%). In 2025, a contractionary fiscal stance is expected to limit real GDP growth to 0.8% (IMF). Private investment will remain weak due to the delayed impact of accommodative monetary policy and ongoing economic uncertainty. Private consumption will benefit from disinflation and rising real wages. In 2026, economic activity is projected to pick up, with GDP growth reaching 1.1%, supported by lower fiscal adjustments and falling credit costs. Growth will be driven by private domestic demand, as the saving rate declines and private investment benefits from monetary easing.

Concerning public finances, the fiscal deficit was estimated at 6.1% of GDP in 2024, up from 5.5% in 2023. Announced fiscal consolidation measures for 2025 amount to 1.4% of GDP, but projections assume a lower effort, with a structural adjustment of the primary balance of 1% of GDP in 2025 and 0.5% in 2026 (data OECD). In 2026, the general government deficit is projected to reach 5.5% of GDP, as some revenue measures from 2025 are set to expire. The revenue-to-GDP ratio is expected to decline by about ¼ pps, while the expenditure ratio will decrease only slightly. Interest payments are forecast to rise by 0.3 pps. After falling to 109.9% of GDP in 2023, public debt was estimated to rise to 112.3% in 2024. It is expected to continue increasing gradually, reaching 117.6% in 2026 (IMF). This rise is primarily driven by high primary deficits and growing interest payments, while the debt-reducing effect from nominal growth is anticipated to be more moderate than in previous years. Inflation gradually decreased in 2024, reaching 1.5% in October, primarily driven by lower energy and food prices, along with a slowdown in services prices. A slight increase is expected in 2025 due to base effects and rising food prices. Energy price growth is forecast to further moderate (+0.8%) in 2025, with electricity prices declining. Average inflation for 2024 is expected to be 2.4%, easing to 1.9% in 2025 and 1.8% in 2026, remaining below the ECB target.

The labour market remained strong in Q1 2024 but slowed in Q2. The unemployment rate fell by 0.2 percentage points to 7.3% in Q2 2024, close to its lowest since 2008, while the employment rate reached a record high of 74.7%. According to data from INSEE, in Q4 2024, the number of unemployed people fell by 63,000 from the previous quarter, reaching 2.3 million, resulting in an unemployment rate of 7.3% for the year. Employment growth is expected to slow in 2025 and 2026 (+0.1% and +0.4%, respectively, after +0.5% in 2024) as the impact of apprenticeship contracts diminishes, hours worked return to 2019 levels, and labour productivity recovers. The unemployment rate is projected to gradually rise to 7.5% in 2025 and 7.6% in 2026 (EU Commission). On average, French citizens enjoy a high GDP per capita (PPP), estimated at USD 67,658 in 2024 by the IMF. Nevertheless, inequalities persist and according to Eurostat one-fifth of the population was at risk of poverty or social exclusion at the end of 2023 (just below the EU average).

 
Main Indicators 2023 (E)2024 (E)2025 (E)2026 (E)2027 (E)
GDP (billions USD) 3,052.713,174.103,283.433,398.063,500.28
GDP (Constant Prices, Annual % Change) 1.11.10.81.11.4
GDP per Capita (USD) 46,30548,01249,52751,11352,503
General Government Balance (in % of GDP) -4.9-5.5-5.5-5.5-5.7
General Government Gross Debt (in % of GDP) 109.9112.3115.3117.6119.8
Inflation Rate (%) 5.72.31.61.81.8
Unemployment Rate (% of the Labour Force) 7.47.47.27.17.0
Current Account (billions USD) -30.402.88-3.95-12.00-14.57
Current Account (in % of GDP) -1.00.1-0.1-0.4-0.4

Source: IMF – World Economic Outlook Database , October 2021

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 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 (1.7%) and employs 3% of the population (World Bank, latest data available). 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. France dominates the global wine industry as the largest producer—accounting for roughly 20% of world output at around 48 million hectoliters annually—and stands as a top exporter with export revenues in the billions (EUR 15.6 billion in 2024). INEE’s first estimates for 2024 agricultural accounts indicate a 7.5% decline in production, driven by lower prices and volume. Crop production was expected to drop 6.8% in volume due to adverse weather, with prices falling by 6.8%, leading to a 13.1% decrease in crop value. Animal production decreased by an estimated 1.4%, with prices dropping 2.3%, partly offset by a slight volume increase of 0.9%. Intermediate consumption was forecast to fall by 8.0%, with a price drop allowing for a slight volume recovery. As a result, gross value added per worker in real terms declined by 7.7% in 2024, following a 9.6% decrease 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. Nowadays, industry represents 18.5% 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 in the fourth quarter of 2024 was 1.9% lower than in the same period of 2023, while production across all industries was 1.2% lower.

The tertiary sector represents 69.7% of the French GDP and employs 78% of the active workforce (World Bank). France is the leading tourist destination in the world: in 2024, over 100 million international visitors visited the country (+2 million y-o-y), generating around EUR 71 billion in international revenue (+12% - data Ministry of Economy). According to the European Banking Federation, financial activities made up 3.2% of total value added in France in 2023, with around 60% attributed to the banking sector. The banking industry employed 355,100 people by the end of 2023, with 326 banks operating within the industry, of which four are recognized by the Financial Stability Board as part of the eight Euro area Global Systemically Important Banks (G-SIBs).

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 2.5 19.2 78.2
Value Added (in % of GDP) 1.7 18.5 69.7
Value Added (Annual % Change) 4.9 4.5 0.7

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, with trade representing 71% of its GDP (World Bank, latest data available). According to data from Comtrade, France’s exports in 2023 were led by powered aircraft (4.7%), medicaments (4.1%), motor cars (3.9%), turbojets and gas turbines (3.1%), and parts and accessories for motor vehicles (2.3%); whereas imports comprised petroleum oils (7.7%), motor cars (5.9%), petroleum gas (4.9%), parts and accessories for motor vehicles (2.5%), and medicaments (2.3%). Aerospace exports continued to recover in 2023 (+16.7%) but remained below 2019 levels. Exports of perfumes, cosmetics, textiles, and capital goods reached record highs. The energy bill fell by nearly 40%, from EUR 115.5 billion in 2022 to EUR 69.0 billion in 2023, mainly due to normalized energy prices (data INSEE).

In terms of countries, the main export destinations in 2023 were Germany (13.5%), Italy (9.0%), Belgium (8.2%), Spain (7.5%), and the U.S. (7.1%), with imports coming chiefly from Germany (15.5%), Belgium (11.4%), Netherlands (8.8%), Spain (8.1%), Italy (8.0%), China (5.8%), and the U.S (5.6% - data Comtrade). Overall, the EU accounted for 55.3% of total exports and 52.4% of imports (INSEE).

France registers a strong structural trade deficit. Nevertheless, 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 2023, France exported goods with a total value of USD 648.4 billion (+4.5% y-o-y), while it imported USD 785.8 billion (-4.5% y-o-y amid lower energy prices). As for the services, France exported around USD 355.7 billion (+3.5% y-o-y), while imports stood at USD 322.5 billion (+11.6% y-o-y). The overall trade balance was estimated to be negative by 2.8% of GDP by the World Bank (from 2% one year earlier). According to the latest data published by the French customs authority, in 2024, CIF imports fell by 4.5% to EUR 698.9 billion, continuing the 2023 decline after two years of sharp increases. The drop, mainly driven by lower energy prices, outweighed a rise in aerospace imports. Manufactured goods imports also fell, with declines in cars and machinery surpassing gains in aerospace. Exports decreased by 1.6% to EUR 598.3 billion, ending three years of growth, mainly due to lower prices. The decline was driven by autos, hydrocarbons, and electronic components, while aerospace, perfumes, and agri-food exports increased. France lost some market share in 2024, following a rare gain in 2023.

 
Foreign Trade Values 20192020202120222023
Imports of Goods (million USD) 654,658581,297715,082823,216785,884
Exports of Goods (million USD) 570,951488,637585,021620,461648,481
Imports of Services (million USD) 267,073227,198262,401288,910322,527
Exports of Services (million USD) 295,746246,122303,380343,547355,735

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

Foreign Trade Indicators 20192020202120222023
Foreign Trade (in % of GDP) 66.458.863.875.870.6
Trade Balance (million USD) -41,032-58,613-77,149-139,511-82,338
Trade Balance (Including Service) (million USD) -15,555-45,869-30,255-71,200-43,852
Imports of Goods and Services (Annual % Change) 1.9-12.28.38.80.3
Exports of Goods and Services (Annual % Change) 2.1-16.611.38.22.1
Imports of Goods and Services (in % of GDP) 33.530.332.539.336.3
Exports of Goods and Services (in % of GDP) 32.928.631.336.534.3

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20242025 (e)2026 (e)2027 (e)2028 (e)
Volume of exports of goods and services (Annual % change) 2.02.73.23.23.2
Volume of imports of goods and services (Annual % change) -1.61.82.32.52.7

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)		 2023
Germany 13.5%
Italy 9.0%
Belgium 8.2%
Spain 7.5%
United States 7.1%
See More Countries 54.7%
Main Suppliers
(% of Imports)		 2023
Germany 15.5%
Belgium 11.4%
Netherlands 8.8%
Spain 8.1%
Italy 8.0%
See More Countries 48.2%

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: François Bayrou (since 13 December 2024)
Next Election Dates
Presidential elections: April 2027
Senate: June 2029
National Assembly: June 2027
Current Political Context
In 2024, France’s major political developments included the dissolution of the National Assembly and the formation of several governments. Following projections showing a strong lead for the far-right National Rally (RN) in the European Parliament elections, President Emmanuel Macron dissolved the National Assembly on June 9, 2024, and called for snap elections. Held on June 30 and July 7, the elections resulted in a hung parliament with no party securing an outright majority. In response, Macron appointed a new centre-right government, led by Prime Minister Michel Barnier, in September 2024, to address the political deadlock. However, Barnier’s government collapsed in December 2024 after a no-confidence vote. François Bayrou, a veteran centrist, was then appointed as the fourth prime minister of the year, with his administration largely supported by the centrist parties MoDem and La République En Marche (LREM).
In the 2024 European Parliament elections, the far-right National Rally, led by Marine Le Pen, emerged as the leading party in France, securing a significant portion of the vote. Macron’s centrist party, LREM, experienced a decline, while traditional parties such as the Socialist Party (PS) and The Republicans (LR) also faced losses.
On the international stage, France has remained a strong supporter of Ukraine amid the ongoing conflict with Russia. Macron has emphasized the need for Europe to increase defence spending to reduce reliance on the United States and to adapt to evolving security challenges. He has also stressed the importance of continued support for Ukraine, despite the potential risks, including the possibility of direct confrontation with Russia.
Main Political Parties
Following the 2024 elections, the main parties represented in the French parliament are:

- National Rally (RN): far-right; first parliamentary representation in 1997. Ran independently and emerged as the leading party in terms of votes
- Renaissance (formerly known as La République En Marche): centre, liberal political movement founded by Emmanuel Macron
- La France Insoumise (Unbowed France - LFI): far-left
- The Socialist Party (PS): centre-left, social democratic party that advocates for social justice, equality, and solidarity
- The Republicans: center-right party founded in 2002. It is the second-largest party in the National Assembly. The party is generally considered Gaullist, supporting a strong French state and national identity
- The Democratic Movement (MoDem): centrist
- The Ecologists - Europe Écologie Les Verts (EELV): emphasises ecology and peaceful and sustainable lifestyles
- Horizons (HOR): centre-right
- Union of the Right for the Republic (UDR): conservatism, right-wing populism
- French Communist Party (PCF): communism, soft euro-scepticism

President Emmanuel Macron’s centrist Renaissance maintained an alliance with the MoDem to consolidate the center ground. On the left, a coalition known as the New Ecological and Social People's Union (NUPES) was formed in 2022, comprising parties like LFI, PS and EELV.

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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