France facts: Economy

France facts: Economy

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Last update on December 11, 2018
Written by CIA World Factbook

Facts about the economy in France.

France is transitioning from an economy that has featured extensive government ownership and intervention to one that relies more on market mechanisms but is in the midst of a euro-zone crisis. The government has partially or fully privatised many large companies, banks, and insurers and has ceded stakes in such leading firms as Air France, France Telecom, Renault, and Thales. It maintains a strong presence in some sectors, particularly power, public transport and defence industries.

Most visited country in the world

With at least 75 million foreign tourists per year, France is the most visited country in the world and maintains the third largest income in the world from tourism. France’s leaders remain committed to a capitalism in which they maintain social equity by means of laws, tax policies and social spending that reduce income disparity and the impact of free markets on public health and welfare.

France’s real GDP contracted 2.6% in 2009 but recovered somewhat in 2010 and 2011. The unemployment rate increased from 7.4% in 2008 to 9.3% in 2010 and 9.1% in 2011. Lower-than-expected growth and increased unemployment have cut government revenues and increased borrowing costs, contributing to a deterioration of France’s public finances. The government budget deficit rose sharply from 3.4% of GDP in 2008 to 7.5% of GDP in 2009 before improving to 5.8% of GDP in 2011, while France’s public debt rose from 68% of GDP to 86% over the same period.

Austerity measures

The French Government is implementing austerity measures that eliminate tax credits and freeze most government spending in an effort to bring the budget deficit under the 3% euro-zone ceiling, by 2013, and to highlight France’s commitment to fiscal discipline at a time of intense financial market scrutiny of euro-zone debt levels.  President Sarkozy secured passage of pension reform in 2010 but the government may delay additional, potentially unpopular, reforms until after the 2012 election.

Labour force: 29.56 million
Country comparison to the world: 21

Unemployment rate: 9.1%
Country comparison to the world: 104