France

Capital: Paris

Local time:
It is %T:%M %A in Paris

GDP growth rate: 1.9% in 2013

FDI stock: 1 008 378 million USD in 2010

Economic trends

The international financial crisis of 2009 led France into a recession, the French economy shrinking by 2.5%. The country has nonetheless resisted this development better than the eurozone average, thanks to a more diversified economy a more solid banking system, as well as a massive stimulus plan. The GDP improved in 2010-2011, mostly driven by the resumption of international trade, however the eurozone sovereign debt crisis put an end to this brief upturn. The economy is now again in a slowdown and the growth foreseen for 2012 is only 0.5%.

With public debt approaching 90% of GDP and a high bank exposure to the struggling eurozone countries, France remains particularly vulnerable. In light of the upcoming presidential elections, the economic policy pursued by the Sarkozy government is trying to reclaim a disgruntled electorate. The German model is put forward as a solution to resume growth and increase employment. Priority is also given to restoring public finances through a policy of fiscal restraint. The government announced its intention to introduce a social VAT to finance a reduction in the employers' social contributions and a tax on financial transactions (Tobin tax), as well as to release funds for partial unemployment and for training the unemployed.

Due to the crisis, the unemployment rate, estimated at 9.8% in 2011, has reached its highest level in 12 years and should continue to worsen in 2012.

Main branches of industry

France is the biggest agricultural power in the European Union, accounting for a quarter of its total agricultural production, and the second agricultural power in the world after the United States. Nevertheless, the agricultural sector only represents a very small part of the country's GDP. It receives significant subsidies, especially from the European Union. Wheat, corn, meat and wine are France's main agricultural products.

France's manufacturing industry is varied, however, the country is in the middle of undergoing a de-industrialization process which translates into numerous relocations. The key industrial sectors in France are telecommunications, electronics, cars, aerospace and weapons.

The tertiary sector represents about three-fourths of the French GDP and employs almost 75% of the active workforce. France is the leading-tourist destination in the world with more than 75 million foreign tourists every year.

International trade

France is one of the 10 leading exporters in the world, exports accounting for more than 50% of the country's GDP.

However, the country registers a strong trade deficit. Imports are developing quickly, as the French population buys a lot of imported goods which are sold relatively cheaply on the local market in comparison to products "Made in France". In addition to this, despite the government's efforts to favor innovation, French exports have relatively low added value. In 2011, France registered a record trade deficit, imports rising more quickly than the fast decreasing exports.

France's main trade partners are the European Union, the United States and China.