Economy of France
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| Economy of France | |
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| Currency | 1 euro (€1) = 100 cent |
|---|---|
| Fiscal year | Calendar year |
| Trade organisations | EU, WTO and OECD |
| Statistics | |
| GDP | $2.09 trillion nominal : $2.98 trillion [2] |
| GDP growth | 0.4% (2008) [3] |
| GDP per capita | Nominal : $45,815 (2008) PPP : $32,261 |
| GDP by sector | agriculture (2.7%), industry (24.4%), services (72.9%) (2004) |
| Inflation (CPI) | 1.5% (2007) [4] |
| Population below poverty line |
6.2% (2004) |
| Labour force | 27.88 million (2006) |
| Labour force by occupation |
services (71.5%), industry (24.4%), agriculture (4.1%) (1999) |
| Unemployment | 8%[1] |
| Main industries | machinery, chemicals, automobiles, metallurgy, aircraft, electronics; textiles, food processing; tourism |
| External | |
| Exports | $490 billion (2006) [5] |
| Export goods | machinery and transportation equipment, aircraft, plastics, chemicals, pharmaceutical products, iron and steel, beverages, electronica |
| Main export partners | Germany 14.7%, Spain 9.6, Italy 8.7%, United Kingdom 8.3%, United States 7.2%, Belgium 7.1% (2005) |
| Imports | $529.1 billion (2006) [6] |
| Import goods | machinery and equipment, vehicles, crude oil, aircraft, plastics, chemicals |
| Main import partners | Germany 18.9%, Belgium 10.7%, Italy 8.2%, Spain 7%, Netherlands 6.5%, United Kingdom 5.9%, United States 5.1% (2005) |
| Public finances | |
| Public Debt | $1.210 trillion (64.7% of the GDP) (2006) |
| Revenues | $1.150 trillion (2006) |
| Expenses | $1.211 trillion (2006) |
| Economic aid | donor: ODA $10.1 billion (2006) [7] |
| Main data source: CIA World Fact Book All values, unless otherwise stated, are in US dollars |
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- This article addresses the current economic situation of France. For historical information, see Economic history of France.
Depending on statistics France is the fifth largest economy in the world, by measurement of GDP (nominal) [2], behind the United States, Japan, China and Germany and has more or less been roughly equal to the United Kingdom for the past 2 decades. In May 15, 2009, the INSEE announced that France has officially entered a recession after its GDP decreased by 1.2% of Q1 in 2009. [3]
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[edit] Dirigisme and decline of dirigisme
Following the Second World War, Fifth Republic France embarked on an ambitious and very successful programme of modernisation under state impulse and coordination. This program of dirigisme, mostly implemented by right-wing governments, involved the state control of certain industries such as transportation, energy and telecommunication infrastructures as well as various incentives for private corporations to merge or engage in certain projects.
However, dirigisme came to be highly contested after 1982 when newly elected socialist president François Mitterrand called for increased governmental control in the economy, nationalising many industries and private banks. By 1983 with the initial bad economic results the government decided to renounce dirigisme and start the era of rigueur ("rigour") or corporatization. As a result the government largely retreated from economic intervention; dirigisme has now essentially receded though some of its traits remain.
Despite significant liberalisation over the past 15 years, the government continues to play a significant role in the economy: government spending, at 53% of GDP in 2001, is the highest in the G-7. Labour conditions and wages are highly regulated. The government continues to own shares in corporations in a range of sectors, including banking, energy production and distribution, automobiles, transportation, and telecommunications which differs from countries like the U.S or U.K where most of these companies are privatised.
[edit] Sectors of the economy
[edit] Industry
France, as with many modern industrialised nations, has a large and diverse industrial base. Leading industrial sectors in France are telecommunications (including communication satellites), aerospace and defense, ship building (naval and specialist ships), pharmaceuticals, construction and civil engineering, chemicals, and automobile production (3.5m units in 2005).
Research and development spending is also high in France at 2.3% of GDP, the third highest in the OECD.[4]
[edit] Energy
With no domestic oil production, France has relied heavily on the development of nuclear power, which now accounts for about 78% of the country's electricity production, up from only 8% in 1973, 24% in 1980, and 75% in 1990. Nuclear waste is stored on site at reprocessing facilities.
In 2006 the net production of electricity in France amounted to 548.8 TWh, of which:[5]
- 428.7 TWh (78.1%) were produced by nuclear power generation
- 60.9 TWh (11.1%) were produced by hydroelectric power generation
- 52.4 TWh (9.5%) were produced by fossil fuel power generation
- 21.6 TWh (3.9%) by coal power
- 20.9 TWh (3.8%) by natural gas power
- 9.9 TWh (1.8%) by other fossil fuel generation (fuel oil and gases by-products of industry such as blast furnace gases)
- 6.9 TWh (1.3%) were produced by other types of power generation (essentially waste-to-energy and wind turbines)
- The electricity produced by wind turbines increased from 0.596 TWh in 2004, to 0.963 TWh in 2005, and 2.15 TWh in 2006, but this still accounts only for 0.4% of the total production of electricity (as of 2006).
[edit] Privatisation of EDF
In November 2004, EDF (which stands for Electricité de France), the largest electricity provider in France, was floated on the French stock market, with the French State keeping more than 70% of the capital. EDF is not the only electricity provider in France. Other electricity providers include CNR (Compagnie nationale du Rhône) and Endesa (through SNET).
[edit] Agriculture
France is the European Union's leading agricultural producer, accounting for about one-third of all agricultural land within the EU. Northern France is characterized by large wheat farms. Dairy products, pork, poultry, and apple production are concentrated in the western region. Beef production is located in central France, while the production of fruits, vegetables, and wine ranges from central to southern France. France is a large producer of many agricultural products and is currently expanding its forestry and fishery industries. The implementation of the Common Agricultural Policy (CAP) and the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) have resulted in reforms in the agricultural sector of the economy.
France is the world's sixth-largest agricultural producer and the second-largest agricultural exporter, after the United States. However, the destination of 70% of its exports are other EU member states and many poor African countries (including its former colonies) which face serious food shortage. Wheat, beef, pork, poultry, and dairy products are the principal exports. The United States, although the second-largest exporter to France, faces stiff competition from domestic production, other EU member states, and third world countries. U.S. agricultural exports to France, totalling some $600 million annually, consist primarily of soybeans and products, feeds and fodders, seafood, and consumer oriented products, especially snack foods and nuts. French exports to the United States are mainly cheese, processed products and wine.
The French agricultural sector is heavily dependent upon subsidies from the European Union, which account for €11 billion. France is the main country in the EU that is against the reduction of subsidies. Subsidies have given France a competitive advantage which also demotes the concept of free trade. Specific government policies, such as the infamous reclassification of French wine as a 'health food' to avoid VAT, also goes a long way to create a thriving domestic sector.
[edit] Tourism
France is the most visited country in the world with over 75 million visitors a year. As of 2004, the most recent statistics compiled by the World Tourism Organization; see World Tourism rankings. Tourism is a significant contributor to the French Economy. In the 1960s the government heavily promoted the development of skiing in the French Alps through the development of new high level resorts including some of the world's most extensive ski trails.
[edit] Weapons industry
France is the third largest weapons supplier in the world. The French arms industry's main customer, for whom they mainly build warships, guns, nuclear weapons and equipment, is the French Government. Furthermore, record high defense expenditure (currently at €35 billion), which was considerably increased under the government of Prime Minister Jean-Pierre Raffarin, have contributed to the success of the French arms industries. In addition, external demand plays a big part in the growth of this sector: for example, France exports great quantities of weaponry to the United Arab Emirates, Greece, India, Pakistan, Taiwan, Singapore and many others.
[edit] External trade
France is the third-largest trading nation in western Europe (after Germany and the United Kingdom). Its foreign trade balance for goods had been in surplus from 1992 until 2001, reaching $25.4 billion (25.4 G$) in 1998; however, the French balance of trade was hit by the economic downturn, and went into the red in 2000, reaching US$15bn in deficit in 2003. Total trade for 1998 amounted to $730 billion, or 50% of GDP--imports plus exports of goods and services. Trade with European Union countries accounts for 60% of French trade.
In 1998, U.S.-France trade totalled about $47 billion--goods only. According to French trade data, U.S. exports accounted for 8.7%--about $25 billion--of France's total imports. U.S. industrial chemicals, aircraft and engines, electronic components, telecommunications, computer software, computers and peripherals, analytical and scientific instrumentation, medical instruments and supplies, broadcasting equipment, and programming and franchising are particularly attractive to French importers.
What the principal French exports to the United States are aircraft and engines, beverages, electrical equipment, chemicals, cosmetics, luxury products and perfume. France is the ninth-largest trading partner of the U.S.
[edit] Regions economy
The economic disparity between French regions is not as high as that in other European countries such as Spain, Italy or Germany.
The most important regions are Ile-de-France (4th agglomerations for her economy in the world), Rhônes-Alpes (industries, services, high-technologies), Provence-Alpes-Côtes d'Azur (services, industry, tourism and wines), Nord-Pas-de-Calais (industries) and Pays de la Loire .
Regions like Alsace, which has a rich past in industry (machine tool), are relatively wealthy without ranking very high in absolute term.
The rurals area are mainly in Auvergne, Limousin, and Centre, and wines productions account for a significant amount of the economy in Aquitaine (Bordeaux region), and champagne for Champagne-Ardennes.
List of French regions ranked by GDP total and per capita.
| Rank | Region | GDP (in millions euros, 2005) |
GDP per capita (euros, 2005) |
|---|---|---|---|
| 1 | Île-de-France | 480 870 | 42 712 |
| 2 | Rhône-Alpes | 165 034 | 28 131 |
| 3 | Provence-Alpes-Côte d'Azur | 120 365 | 25 693 |
| 4 | Nord-Pas de Calais | 86 747 | 21 555 |
| 5 | Pays de la Loire | 84 990 | 25 401 |
| 6 | Aquitaine | 76 895 | 25 374 |
| 7 | Bretagne | 73 511 | 24 443 |
| 8 | Midi-Pyrénées | 67 486 | 25 140 |
| 9 | Centre | 61 968 | 25 005 |
| 10 | Languedoc-Roussillon | 53 197 | 21 752 |
| 11 | Lorraine | 53 013 | 22 769 |
| 12 | Alsace | 46 870 | 26 196 |
| 13 | Haute-Normandie | 44 864 | 24 923 |
| 14 | Picardie | 41 276 | 22 022 |
| 15 | Poitou-Charentes | 39 286 | 23 311 |
| 16 | Bourgogne | 38 733 | 23 880 |
| 17 | Champagne-Ardenne | 33 550 | 25 093 |
| 18 | Basse-Normandie | 33 253 | 23 099 |
| 19 | Auvergne | 30 632 | 23 127 |
| 20 | Franche-Comté | 27 016 | 23 782 |
| 21 | Régions d'outre-mer (2002) | 22 891 | 13 375 |
| 22 | Limousin | 16 326 | 22 664 |
| 23 | Corsica | 5 846 | 21 508 |
Source : INSEE.
[edit] Departements economy and cities
Some Departements in France are very rich compared to others. Paris, Hauts-de-Seine (GDP per capita : €67 000 in 2000) and Rhône, for example, concentrate a lot of company headquarters. The Yvelines is the second richest departement in France according to the income of inhabitants. In Hauts-de-Seine the wages are on average €28 000 per capita, in Yvelines €27 900, and in Paris €25 000 against €15 000 in France (data 2004 INSEE).
Finally, in France like in other countries, a lot of cities are extremely rich in much of Regions, so the richest is Marnes-la-Coquette in Hauts-de-Seine with €81 750 per household (according to INSEE, data 2004)
A quarterly report prepared by the Economist Intelligence Unit on behalf of Barclays Wealth in 2007 estimated that there were 3,000,000 dollar millionaires in France. (page 7)
[edit] Notes and references
[edit] See also
- France
- Economic history of France
- Economy of Paris
- Poverty in France
- Economy of Europe
- Economy of the European Union
[edit] External links
- Official French exporters directory - Firmafrance.com is the Official French exporters B2B directory, powered by Ubifrance and officially endorsed by the Ministry of the Economy, Finance and Industry of France.
- OECD's France country Web site and OECD Economic Survey of France
- French National Institute for Statistics and Economic Studies (INSEE)
- Investing in French Stocks - Nov, 2006 Global investor commentary on the current state of French stocks.
- The French Revolution of 2007 - Nicholas Vardy March 9, 2007 - Investor perspective on changes affecting French markets and economy.
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