Economy of France

World France, 6epuissance economic behind the the United States, the Japan, the Germany, the China (since 2005) and the the United Kingdom, has a nominal GDP of: 1792 billion euros in 2006. It is classified with the 16th rank for GDP per capita, slightly above the average of UE-15.

For a long time, France remained the 4th economic power, and the variation with Great Britain (2275 billion dollars) remains weak but rather growing. The variations of Foreign exchange rate between the dollar, the Euro and the Pound sterling influence this classification. On the other hand, the going beyond in this classification by the China, and soon by the India, is inevitable. In classification by GDP in PPP, France is the 7th country.

The French economy is the fourth world exporter, the second for the services and the agricultural produce and agroalimentary. It is the first world tourist destination and has the second maritime zone of the world.

The French economy, that some estimate in the process of disindustrialization, is mainly a saving in services. The Tertiary sector occupies 72  % of the active population, while the Primary sector (Agriculture, fishing) represents nothing any more but 4  of it; % and the Secondary industry (Industry) 24  %.

The France belongs to the countries founders of the European Union and the Euro area. Its economy profited from the installation of the Common Market European.

Economic history

Before the end of the “Trentes Glorious” (1973)

See also: economic History of France

The economic power of France was related to its demography a long time. As from the 19th century, industrial takeoff makes France a prosperous and powerful country, catching up with the economic development of England. During the Second Empire and Third Republic, France is powerful, and extends and develops its colonies. The two world wars of the 20th century, then the decolonization, will in general reduce the economic weight of Europe in the world, and of France in particular. Between 1946 and 1973, France knew however one period of strong growth related to the technological correction with respect to the the United States, the “Glorious Thirty”.

Recent evolutions

The French profit from a high Standard of living, but their feeling is of living one crisis period since the end of the Glorious Thirty. For a long time, this “crisis” did not prevent a significant growth, and the maintenance of the economy in an enviable world place, strongly exporting; but for some time, the topics of the “decline” and the fear of foreign competition (immigration, universalization, even European integration) took an increased force, while the economic indicators become more alarming.

However, certain macro-economic statistics relative to the twenty-five last years show a significant regression in part of the international economic classifications. One as of these macro-economic data, the richness or Gross domestic product (GDP) per capita, is particularly eloquent. In 1980, in spite of the second oil crisis (1979) which gave to the French a feeling of collective crisis, France was one of the richest countries in the world. The GDP per capita was with the sixth world rank, behind the the United States, the Suisse, the Luxembourg, the Iceland or the Canada.

At that time, the French profited from one of the more high levels of life, far in front of certain economic rivals like the Germany, the Japan or the the United Kingdom, relegated to 16th, 17th and 18th places of this world economic classification. The standard of living in the Scandinavian countries was also in-on this side French level. Years 1980 will be those of an important economic decline.

In 1994, the GDP per capita of the French is not any more but with the 13th world rank. Certain economies, such those of Germany or Japan, knew a serious progression. Others underwent a fall even stronger than that of the French economy, with the image of the Canada (which will be raised as from 1995). The following decade will be that of a less marked decline.

In 2004, the GDP per capita in France is classified with 16th or 17th world rank (according to the ways of calculating). Meanwhile, of the countries like the the United Kingdom (regarded a long time as in crisis), the Ireland (regarded before as a small rather poor country), continuation the liberalization of their economies knew a big raise of their standard of living, outclassing the French evolution.

In spite of the absence of recessions during these twenty-five last years, contrary to Japan (which lived a crisis related to the bursting of the Japanese Speculative bubble) or to Germany (which had to face the economic shock of the reunification), the French economy is in a phase of low growth. The level of GDP per capita, who approached that of the the United States, moves away again: the level is lower of 25  %.

The June 21st 2005, the Minister for the Economy Thierry Breton alerted the opinion on two indicators. The first indicator is the national debt which should reach 1  100 billion euros at the end of the year, and whose financial expenses are equivalent to the amount of the Income tax. The second indicator is the decline of the Activity ratio of the French, resulting from several factors: the late entry of the young people in the working life (22 years and half on average), the reduction in the effective age of the retirement (57 years), the lengthening of the life expectancy and the reduction of the Hours worked by employee.

General data

Assessment of the French economy

See also: Gross domestic product of France

  • sources:
  • (1) APU = public administrations
  • (2) ISBLSM = non-profit-making Institutions with the service of the households
  • (3) GFCF = Gross fixed capital formation

Foreign trade

Balance foreign trade of goods and services

August 1st

Exchanges of goods

The commercial Balance of France grows hollow regularly since 2002 with a deficit of 28,4 billion euros in 2006. Exports represented 389 billion euros and the imports 430 billion. In 2002 with 5,1% of the world exports, France was the 4th world exporter, with equality with the China, behind the the United States, the Japan and the Germany.

The first customer of France is Germany. This country is also its leading vendor.

Exports increase always, but less quickly than the imports. The digging of the commercial Balance is due to the fact that the French cars were less better sold, but also with the imports of Pétrole whose price did not cease increasing.

  • Principal surplus sectors in 2006:

    • the Agro-alimentary (+ 8,9 billion euros),
    • the Automobile (+ 5,5 billion euros, against +11,6 in 2003),
    • the capital equipment (+ 7,4 billion euros).
  • Principal overdrawn sector: the energy with - 45,8 billion euros in 2006 what is the double of 2003.

| Colors= id: lightgrey been worth: Gray (0.9) id: darkgrey been worth: Gray (0.7) id: sfondo been worth: rgb (1,1,1) id: barred been worth: rgb (0.9, 0.7, 0.7) id: red been worth: red

ImageSize = width: 500 height: 250 PlotArea = left: 50 bottom: 50 signal: 30 right: 30 DateFormat = x.y Period = from: - 30 till: 6 TimeAxis = orientation: vertical ScaleMajor = gridcolor: darkgrey increment: 5 start: - 30 ScaleMinor = gridcolor: lightgrey increment: 1 start: - 30 BackgroundColors = canvas: sfondo

LineData = At: 0 color: red to bush-hammer: back

BarData= bar: 2003 text: 2003 bar: 2004 text: 2004 bar: 2005 text: 2005 bar: 2006 text: 2006

PlotData= color: width barred: 60 align: left

bar: 2003 from: 0 till: 2.4 bar: 2004 from: 0 till: -5.1 bar: 2005 from: 0 till: -21.2 bar: 2006 from: 0 till: -28.4

PlotData= bar: 2003 At: 2.4 fontsize: S text: -2,4 shift: (- 10, - 10) bar: 2004 At: -5.1 fontsize: S text: -5,1 shift: (- 10, - 10) bar: 2005 At: -21.2 fontsize: S text: -21,2 shift: (- 10, - 10) bar: 2006 At: -28.4 fontsize: S text: -28,4 shift: (- 10, - 10)

|}

Exchanges of services

The exchanges of Service S (which do not return counts of it in the commercial Balance French) remain positive thanks to the sector of the tourism, which with him only forms one exceeding of +10,1 billion euros in 2006, which is 2 times more than the sector of the car.

Currency

See also: Euro

January 1st, 1999, the Euro replaced the frankly, old national currency. Consequently, the control of the Monetary policy is not done any more with the Direction of the Treasury or the Banque de France; the European Central bank follows the common monetary policy of the Euro area.

During the 20th century, the franc will have been devaluated many times, in order to obtain improvement temporary of economic Compétitivité. Starting from the entry of the France in the European Currency snake in 1972, then in the European Monetary System in 1979, the franc is fastened with the Deutsche Mark (the last devaluation intervenes in 1983), and becomes a “stable” currency.

Source: http://www.euro.gouv.fr/zoom3/index.htm

Companies

See also: French Companies

According to a report/ratio of the DREE (2002), the undertaken French have more 22  000 subsidiary companies abroad which employ approximately 5 million people. In the U.E with 25, it is the Poland which receives the most French subsidiary companies (153  813 paid).

Employment and unemployment

See also: Job market in France, Unemployment in France

The France knows a fort Unemployment rate since the years 1980, although the figures of unemployment started to increase as of the years 1960. Unemployment existed before, but one then thought of being able to reach a situation of Plein-emploi with very few unemployed.

Unemployment is established with 8  % in 2007 according to the official statistics. This figure shows a light improvement compared to the years 1990 (between 9.5  % and 12  %).

Investments

In 2005, France placed in third world position for the direct investments abroad (IDE) with 63,5 billion dollars invested on its ground.

Poverty

See also: Poverty in France

In France, independent measurements of poverty used are the poverty lines relative to 50% and 60%. These poverty lines, being relative, increase simultaneously with the average standard of living, which explains why they do not decrease in spite of the increase continues of GDP per capita.

In 2005,3.73 million people (6.6% of the population) lived under the poverty line of 50%, and 7.13 million people (12.1% of the population) lived under the poverty line of 60%.

Poverty decreases in France: for example, poverty according to the threshold relative to 60% passed from 13.5% in 1996 to 12.1% in 2005.

Economic structure

Primary sector

See also: Primary sector in France

The Primary sector gathers the Agriculture, the fishing, the Forestry development and the Mining.

According to INSEE (2002), 978  300 people work in agriculture what represents 3,9  % of the active population. The share of the farmers in the French active population does not cease decreasing. Between 1978 and 2002, the profession lost 1,08 million employment.

France is the first agricultural producer of the European Union. The principal productions are the Céréale S (corn, corn) and the Sucre, the wine, the products Lait iers, the fruit and vegetables, the animals and meat products.

Agriculture forms the substrate of the strong industrial sector of the Agro-alimentaire. The common Agricultural policy (CAP), which was to reinforce it, proved to be a source of permanent problems, without forgetting the political conflicts at the European level. The CAP now seems a relic in deferment, support of increasingly environmental and social and less and less agricultural policies.

In 2004, France produced 70 million tons of cereals. Approximately half is represented by the queen production, which is the common wheat, for half hardly suitable for making bread and is intended for consumption of food of the cattle. Barleys and corn, take the same way essentially, following the example colza, pea and other field crops.

France has one of the most important livestock of the European Union. One counts in particular more than 20 million Bovin S, 16 million Porcin S and 9 million Ovin S. It provides nearly the quarter of the consumed bovine meat in Europe, it is the largest European producer of bovine meat and of poultries and, it is the third producing one of sheep and goat meat and porcine.

It is noted that half of the French farmers has an activity of breeding in completion of their activity of culture.

The energy production is partially independent thanks to the French nuclear industry; however, France imports the vast majority of its hydrocarbon consumption. He is regarded as strategic: he provides uses of Engineer and Ouvrier S and provides work of Research and development to companies of the Tertiary sector.

France is the 5th industrial power of the world. According to DATAR, the share of the Industrie in the GDP is assembled to 19,5  % in 2002 and represents 15  % of the French active population. Most of “traditional” industries (textile, clothing, metallurgy) are delocalized in the countries with cheap labor. Taking into consideration rough figure (France lost 1  533  000 industrial employment between 1978 and 2002), certain analysts speaks about Désindustrialisation.

Nevertheless, one notes a externalisation of the services to industries which represent in 2002 14,7  % of the GDP. Employment necessary for these externalized services rises with 14,2  % of the total staff complement, all confused sectors. Consequences: French industry employs directly or indirectly 30,1  % of the total staff complement, and industry produced 35,4  % of the French GDP on the whole. In addition, beside the decline of heavy industries and traditional, one attends a rise of the importance of industries with high Added-value like high technologies.

Commercial tertiary sector

See also: Tertiary sector in France

The Tertiary sector (commercial and not merchant) employs 71.5% of the active population, that is to say more than 16 million French.

Tourism

See also: Tourism in France

France accommodated 76,5 million tourists in 2001, that is to say 10,8  % of the world total. The tourist sector weighs for 6,7  % of the GDP, and employs nearly a million credits in 2002. The rate of French taxes and social security deduction is higher of more than four points than the European average.

The variation with the other countries was accentuated between 2002 and 2006; the Public expenditure increased by 0,9 point of GDP in France, whereas they moved back over the same period of 0,2 point of GDP in the euro area. They reach 53.4% of the GDP in France in 2006.

The taxation applies to the companies (Corporation tax, Professional tax,…), personal incomes (Income tax (IRPP),…), the wages (National insurance contributions, generalized Social contribution (CSG), CRDS,…) and the consumption of goods and services (VAT with 19,6  % (normal level), reduced taxes with 5,5  % or 2,1  %).

Regulations

The Regulation S, if they can make it possible to avoid excesses, can obérer freedom undertake and attach the growth and lower the Taux of employment. For example, SMIC, the Minimum wage French, is fixed by the State at a very high level compared to other countries, and can prevent the job creation and the entry of the young people on the job market; the imposition of a Legal duration of rigid work for certain types of workers, of 35 hours, would have had fatal consequences on economic operation.

More generally, the majority of the economists recommend to raise the many brakes to the growth and employment, that the public administrations gradually imposed.

State enterprises

See also: Company publique#France, State enterprises in France

The supervision of the State on certain economic sectors seemed necessary in the economy devastated to leaving the Second world war, and of many nationalizations of force were realized. The arrival of the left to the capacity with the election as president of François Mitterrand was followed of a large wave of nationalizations in 1981-82, quickly followed, because of the economic disaster, by the Turning of the rigor of 1983 and important privatizations.

Since, the governments sucessifs have little by little privatized of the state enterprises, by preoccupations with an effectiveness, but also to fill the Budget deficits successive. The French politicians and the opinion remain impressed of a Néo-colbertisme which would like that the public authorities preserve the control of the companies considered to be “strategic”.

Random links:Concrete | El toser del alma | Uster | Positive expiratory pressure | The Shore of Syrtes | Manpower of the world cup of Rugby at XV female 2006 | Problème_de_sac_à_dos