France Economic Outlook
Diverse economic structure:
France's economy—one of the world's largest—has a mixed structure, with a significant presence of both private and state-owned enterprises. Key sectors include manufacturing, particularly in automation, aerospace and luxury goods, services—notably in tourism and finance—and a robust agricultural sector, renowned for wine and dairy products.
Growing financial role:Paris is one of the key financial centers in Europe—a role which has been strengthened since Brexit as some financial activity formerly in London shifted to Paris. Banks have reportedly relocated over 5000 employees from London to Paris since the UK left the EU.
A key EU player:France is a founding member of the eurozone and has adopted the euro as its currency. The country is one of the leading voices in shaping EU policy, with the France-Germany political axis the bloc's most important driving force. President Macron—in office since 2017—has advocated closer EU integration and strategic independence from foreign powers. More recently, Macron has thrown his weight behind the idea of EU enlargement into southern and eastern Europe.
Liberalizing reforms:Under President Macron, the French economy has been liberalized, with the labor market made less rigid, taxes cut, and unemployment insurance revamped. These measures have coincided with an acceleration in investment and the unemployment rate falling to an over-decade low in recent years. However, the changes have also provoked a backlash among large sectors of the population and generated significant social unrest. Some of the most high-profile protests were the "Yellow Vest" movement in 2018 and 2019, and the strikes over pension reform in 2023. Moreover, this wave of liberalization appeared to reach an end after Macron's party lost dozens of seats in parliament in the July 2024 snap elections.
Multiple domestic challenges:The public debt ratio is among the highest in the EU at well over 100% of GDP, posing a risk to fiscal stability. Moreover, public resistance to structural reforms is high, often resulting in widespread protests that hamper economic activity. Additionally, regional disparities in economic development and integration of immigrant populations into the labor market remain ongoing challenges.
France's economic outlook:Our forecasts for the French economy are underwhelming, especially given the country's strong demographics and business-friendly reforms in recent years. The Consensus among our panelists is for GDP growth to merely track the Euro area average over our forecast horizon.
France's Macroeconomic Analysis:
Nominal GDP of USD 3,056 billion in 2023.
Nominal GDP of USD 2,773 billion in 2022.
GDP per capita of USD 42,244 compared to the global average of USD 10,589.
GDP per capita of USD 46,365 compared to the global average of USD 10,589.
Average real GDP growth of 1.1% over the last decade.
Average real GDP growth of 1% over the last decade.
Sector Analysis
In 2021, services accounted for 82% of overall GDP, manufacturing 9%, other industrial activity 7%, and agriculture 2%. Looking at GDP by expenditure, private consumption accounted for 52% of GDP in 2021, government consumption 24%, fixed investment 25%, and net exports -1%.International trade
In 2021, manufactured products made up 76% of total merchandise exports, mineral fuels 3%, food 14%, ores and metals 3% and agricultural raw materials 1%, with other categories accounting for 3% of the total. In the same period, manufactured products made up 74% of total merchandise imports, mineral fuels 10%, food 10%, ores and metals 3% and agricultural raw materials 1%, with other goods accounting for 2% of the total. Total exports were worth USD 669 billion in 2022, while total imports were USD 813 billion.Main Economic Indicators
Economic growthFrance's GDP growth over the last decade was modest, reflecting broader European economic trends, though the Macron government introduced some liberalizing economic reforms. The economy experienced a sharp downturn due to the COVID-19 pandemic but saw a recovery in 2021-2023, supported by government stimulus and improved consumer spending. To read more about GDP growth in France, go to our dedicated page.
Fiscal policy
France's fiscal deficit fluctuated over the last decade. Efforts to reduce the deficit through spending cuts and tax reforms were partly successful in the years before the pandemic. However, the deficit then widened due to social handouts to quell unrest, a stalled economic reform agenda and the pandemic. In 2023, France's budget deficit was among the largest in the Euro area. Find out more on our dedicated page.
Unemployment
France's unemployment rate over the last decade gradually decreased, reflecting the country's efforts to reform the labor market and stimulate job creation. The COVID-19 pandemic caused a temporary setback, but by 2022-2023, the unemployment rate was close to the lowest level since the late 2000s, indicating some progress in reforming France's labor market. For more information on France's unemployment click here.
Inflation
France experienced generally low inflation before and during the COVID-19 pandemic, with rates mostly below 2%. There was a notable uptick in inflation post-pandemic due to supply constraints, a decline in gas supply and recovering demand. However, inflation in France peaked below that in the broader Euro area thanks to the country's large nuclear energy capacity and government measures to limit the pass-through from higher energy prices. Go to our France inflation page for extra insight.
Monetary Policy
In France, monetary policy is determined by the European Central Bank (ECB). The European Central Bank (ECB) maintained historically low policy rates from 2013 to 2021, reflecting prolonged economic sluggishness and low inflation in the Euro area. By 2022 however, the focus had shifted towards normalizing policy in response to economic recovery and rising inflation, with policy rates hiked to an over decade high. See our France monetary policy page for additional details.
Exchange Rate
France is part of the Euro area single currency bloc. The euro saw volatility over the last decade in response to changes in global risk sentiment, and relative interest rates in the U.S. vs Europe. That said, the euro has tended to depreciate vs the dollar, likely on higher safe-haven demand and the United States' economic outperformance relative to the Eurozone. For more info on the euro, click here.
Economic situation in France
The economy got a temporary lift from the Paris Olympic and Paralympic Games in Q3, as broadcasting rights and ticketing sales aided services activity. However, this lift will have disappeared in Q4, with activity further weighed on by political turmoil; our panelists see the economy stagnating in the period following 0.4% sequential growth in the third quarter. Looking at GDP components, weaker readings for private and government spending are seen offsetting stronger readings for exports and investment. Available data is downbeat, with both industrial production and retail sales shrinking in October. In politics, centrist François Bayrou was recently nominated as prime minister after Michel Barnier lost a confidence vote. Bayrou faces the challenge of getting a deficit-cutting budget through a divided parliament; snap parliamentary elections are a distinct possibility next year.France Economic Forecasts
Projections out to 2034.54 indicators covered including both annual and quarterly frequencies.
Consensus Forecasts based on a panel of 53 expert analysts.
Want to get insight on the economic outlook for France in the coming years? FocusEconomics collects projections out to 2034 on 54 economic indicators for France from a panel of 53 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts, and averaged to provide one Consensus Forecast you can rely on for each indicator. This means you avoid the risk of relying on out of date, biased or outlier forecasts. Our Consensus Forecasts can be visualized in whichever way best suits your needs, including via interactive online dashboards , direct data delivery and executive-style reports which combine analysts' projections with timely written analysis from our in-house team of economists on the latest developments in the France economy. To download a sample report on the France's economy, click here. To get in touch with our team for more information, fill in the form at the bottom of this page.
France Economic Indicators
Frequently Asked Question about France's Economy
What is France's main economic sector?
What is the future of the French economy?
What is the richest region of France?
The main economic sector in France is the services sector, which accounts for about two-thirds of GDP. This includes activities such as retail, tourism, financial services, and government spending. However, industry also plays an important role in the economy.
The economy is expected to grow in 2023 and 2024, and inflation is expected to come down from its current high levels. The government is also taking steps to reform the economy, which could help to boost growth in the long term. However, there are also some risks to the outlook, such as the war in Ukraine and flare-ups of social unrest.
The Île-de-France region, encompassing Paris and its surrounding areas, is the richest region in France. It is the country's economic powerhouse, contributing significantly to the national GDP, largely due to its dense population, high concentration of corporate headquarters, financial services, and its status as a global cultural and tourist destination.