Since the early s, French companies have faced competition from their European counterparts with less help from the government. In an effort to privatize the state-owned industries, the government is selling off its shares in France Telecom and Air France, along with companies from the insurance, banking, and defense industries. Because of its fertile and vast land, France has become a major agricultural producer of Europe, making use of modern agricultural technology.
The agricultural sector enjoys generous government support in the form of subsidies. This policy sometimes becomes a point of contention with France's EU counterparts. Three-fifths of the land is devoted to agricultural-related economic activities.
Besides wine, France is famous for its beef, veal, poultry, and dairy products. Various types of grains also make France the leader among European nations in agricultural production. Overproduction of the world-renowned French wine and competition from foreign producers have conspired to bring about decreases in its price, although the government as of has tried to discourage overproduction in an attempt to reverse this alarming trend.
France has a long seashore, but fishing is not one of the major components of the economy, except in coastal areas such as Normandy and Brittany, the southern Atlantic coast, and the Mediterranean, where it employs a significant local labor force. France has few fishing ports used in shipment of fish products and ranks 20th in the world in total fish production. Even though France has a highly-educated labor force, unemployment—which stood at 9. Employment opportunities for college graduates were especially lacking.
A hour work week was introduced in by the government in order to create more jobs. Small companies especially objected to the measure as burdensome, for it forced them to hire more workers. Larger firms are more comfortable with the shortened work week, arguing that participation in the European Monetary Union and a common currency have brought new flexibility into the market and hence has eliminated the costs brought by the shortened work week.
France still maintains its ties with many of its former colonies, especially those in Africa, such as Algeria, Benin, and Senegal. France provides support in the form of French francs in order to stabilize some African currencies. Industrial output slid 1.
According to a preliminary estimate, GDP grew a robust 3. According to a flash estimate, consumer prices increased 0. Major Economies. South-Eastern Europe.
Sub-Saharan Africa. Central America. Monetary and Financial Sector. Precious Metals. Region Reports. Country Reports. Annual Subscriptions. France Economic Outlook October 26, Available data suggests that GDP grew at a stronger sequential pace in Q3, chiefly on the back of improved domestic conditions.
Industrial output expanded markedly in August, which, coupled with rising business confidence on average in Q3, suggests that private sector activity gained steam in the quarter. Similarly, household spending appeared to strengthen, as evidenced by a lower unemployment rate in July—August and improved consumer confidence in the quarter.
Turning to Q4, early data suggests that the economy is cruising at two speeds: Supply disruptions weighed on manufacturing output in October, with the PMI declining for the first time since January, while the services PMI hit a three-month high in the same month. In other news, on 12 October, President Emmanuel Macron unveiled a five-year investment plan worth EUR 30 billion, largely focusing on industrial innovation and energy transition.
France Economic Growth GDP is seen growing at a weaker rate in , largely due to a less favorable base effect. That said, the ongoing lifting of Covid curbs, combined with pent-up demand, will spur household spending. This, coupled with healthy investment growth amid incoming EU funds, will buoy the economy.
The presidential elections are a key factor to watch. Our analysts see the economy expanding 3. France Economy Data Population million Sample Report 5 years of France economic forecasts for more than 30 economic indicators. In manufacturing, France is one of the global leaders in the automotive, aerospace and railway sectors as well as in cosmetics and luxury goods. Furthermore, France has a highly educated labor force and the highest number of science graduates per thousand workers in Europe.
Additionally, France is the most visited country in the world, making tourism a prominent sector in the economy. Compared to its peers, the French economy endured the economic crisis relatively well.
However, recovery has been rather slow and high unemployment rates, especially among youth, remain a growing concern for policymakers. The cost of labour to employers in France also includes social security contributions that are higher than in most other countries. There is a catalogue of other issues , including welfare, that is alleged to discourage people taking low-paid work, and extensive regulation of business.
The result, it is argued, is a persistent unemployment problem. Many also argue that France has too large a public sector. France does have high levels of public services, but the OECD says it means there is a "heavy burden of taxation" that curtails incentives to work, save and invest.
Much of the spending, the OECD says, is poorly targeted. The contrary view is that France is suffering from insufficient demand for goods and services. A group of economists including Thomas Piketty, the author of Capital in the Twenty-first Century, wrote in the French newspaper Le Monde that labour law reforms proposed by the government won't reduce unemployment. He has blamed austerity for setting back the eurozone's economic recovery. Robert Hancke of the London School of Economics blames the loss of economic policy control as a result of membership of the eurozone.
Membership of the eurozone means some of those levers, in particular interest rates, are in the hands of the European Central Bank, which sets policy for the whole region. The strains on the government's finances and the eurozone's rules for managing them limit France's room for manoeuvre to use government spending or tax cuts to stimulate demand.
The OECD does say, however, that it's important to consolidate the government finances at an "appropriate and recovery-compatible pace". In other words, don't overdo it and impose excessive damage on the economy by hitting demand even more in the effort to get borrowing needs down to levels that are sustainable in the long term.
President Hollande has accepted the case for labour reform, and his Labour Minister, Myriam El Khomri, has introduced legislation intended to address some of the things that business voices say make it too expensive to take on new workers. The reforms would:. That has met protest and the provisions have been amended in response. One supporter of reform said it was turning into a "veritable catastrophe".
It is startling language in light of the standard of living enjoyed by many French people. But there's no question that the country's disappointing performance is an issue for its unemployed, for its social cohesion and for its European neighbours, who could really do with a strong, vibrant French economy. Nightly people's protests animate Paris. Hollande's last throw of the dice. France protests against labour reforms.
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