France: Economy Overview

France is in the midst of transition from a well-to-do modern economy that has featured extensive government ownership and intervention to one that relies more on market mechanisms.

Economy Overview

The government has partially or fully privatized many large companies, banks, and insurers, and has ceded stakes in such leading firms as Air France, France Telecom, Renault, and Thales. It maintains a strong presence in some sectors, particularly power, public transport, and defense industries. The telecommunications sector is gradually being opened to competition. France's leaders remain committed to a capitalism in which they maintain social equity by means of laws, tax policies, and social spending that reduce income disparity and the impact of free markets on public health and welfare. France has weathered the global economic crisis better than most other big EU economies because of more resilient consumer and government spending, and lower exposure to the downturn in global demand. Nonetheless, France's real GDP contracted 2.2% in 2009, while the unemployment rate increased from 7.4% in 2008 to nearly 10%. In response to the economic crisis the government passed a $35 billion stimulus plan in February 2009 centered on investment in infrastructure and tax breaks for small businesses. Paris also created a $25 billion strategic investment fund to protect French companies from foreign takeovers, and President Nicolas SARKOZY proposed a $52 billion plan for strategic investments in science and technology. These various stimulus and investment measures are contributing to a deterioration of France's public finances. France's tax burden remains one of the highest in Europe - at nearly 50% of GDP. The government budget deficit rose sharply from 3.4% of GDP in 2008 to over 8% of GDP in 2009, topping the 3% euro-zone ceiling in both years. SARKOZY is expected to seek passage of some structural reforms - notably to the pension system and government bureaucracy - which have the potential to cut public expenditures, while he may delay additional, more costly, reforms.

GDP (purchasing power parity):

GDP (official exchange rate):

$2.676 trillion (2009 est.)

GDP - real growth rate:

GDP - per capita (PPP):

GDP - composition by sector:

agriculture: 1.8%
industry: 19.3%
services: 78.9% (2009 est.)

Labor force:

28.1 million (2009 est.)
country comparison to the world: 20

Labor force - by occupation:

agriculture: 3.8%
industry: 24.3%
services: 71.8% (2005)

Unemployment rate:

Investment (gross fixed):

20.6% of GDP (2009 est.)
country comparison to the world: 88

Budget:

revenues: $1.286 trillion
expenditures: $1.487 trillion (2009 est.)

Inflation rate (consumer prices):

0.1% (2009 est.)
country comparison to the world: 29
2.8% (2008 est.)

Commercial bank prime lending rate:

Stock of domestic credit:

Agriculture - products:

wheat, cereals, sugar beets, potatoes, wine grapes; beef, dairy products; fish

Industries:

machinery, chemicals, automobiles, metallurgy, aircraft, electronics; textiles, food processing; tourism

Industrial production growth rate:

-7.7% (2009 est.)
country comparison to the world: 135

Oil - production:

70,820 bbl/day (2009 est.)
country comparison to the world: 57

Natural gas - production:

877 million cu m (2009 est.)
country comparison to the world: 64

Current account balance:

 -$64.23 billion (2008 est.)

Exports:

Exports - commodities:

machinery and transportation equipment, aircraft, plastics, chemicals, pharmaceutical products, iron and steel, beverages

Exports - partners:

Imports:

$692.1 billion (2008 est.)

Imports - commodities:

machinery and equipment, vehicles, crude oil, aircraft, plastics, chemicals

Imports - partners:

Debt - external:

$4.935 trillion (31 December 2008)

Stock of direct foreign investment - at home:

Stock of direct foreign investment - abroad:

Exchange rates:

Source: CIA - The World Factbook