This Fact Book on France gives a brief overview of the main aspects of the French economy. The Fact Book can be used as a quick reference point for key ratios, etc. It includes many informative charts and tables.
The French economy is the fifth largest in the world measured by nominal GDP and accounts for about a fifth of euro area GDP. France weathered the global crisis better than most advanced economies. This is partly explained by the economy being less open than, for example, Germany's, with a fairly solid financial sector, a large public sector and substantial fiscal stimulus. The recovery after the crisis has been weak and GDP has been almost unchanged since 2011. France was downgraded from AAA to AA+ by S&P in January 2012. Moody's followed and stripped France of its second AAA rating in November 2012. Fitch has kept its AAA rating for France but all three rating agencies have the country on negative outlook.
The government budget deficit as a share of GDP is higher than the euro area average, while the debt-to-GDP ratio is very close to the euro area average. The budget for 2013 had an ambitious and unrealistic target of reducing the public deficit to 3% of GDP. Instead of introducing new austerity measures the government in April decided to revise the planned budget deficit upwards to 3.7% of GDP. Compliance with the Stability and Growth Pact’s 3% of GDP target is now expected to be reached in 2014. Public spending is set to reach as much as 56.9% of GDP this year and to drop only slightly next year. The new budget may also turn out to be overly optimistic. The economic outlook for France remains very weak with several indicators pointing to a deepening recession, which would put additional pressure on the budget. Looking further ahead an increasing oldage- dependency ratio reinforced by President François Hollande’s rollback of the retirement age to 60 from 62 will put pressure on public finances.
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The French economy is the fifth largest in the world measured by nominal GDP and accounts for about a fifth of euro area GDP. France weathered the global crisis better than most advanced economies. This is partly explained by the economy being less open than, for example, Germany's, with a fairly solid financial sector, a large public sector and substantial fiscal stimulus. The recovery after the crisis has been weak and GDP has been almost unchanged since 2011. France was downgraded from AAA to AA+ by S&P in January 2012. Moody's followed and stripped France of its second AAA rating in November 2012. Fitch has kept its AAA rating for France but all three rating agencies have the country on negative outlook.
The government budget deficit as a share of GDP is higher than the euro area average, while the debt-to-GDP ratio is very close to the euro area average. The budget for 2013 had an ambitious and unrealistic target of reducing the public deficit to 3% of GDP. Instead of introducing new austerity measures the government in April decided to revise the planned budget deficit upwards to 3.7% of GDP. Compliance with the Stability and Growth Pact’s 3% of GDP target is now expected to be reached in 2014. Public spending is set to reach as much as 56.9% of GDP this year and to drop only slightly next year. The new budget may also turn out to be overly optimistic. The economic outlook for France remains very weak with several indicators pointing to a deepening recession, which would put additional pressure on the budget. Looking further ahead an increasing oldage- dependency ratio reinforced by President François Hollande’s rollback of the retirement age to 60 from 62 will put pressure on public finances.
To Read the Entire Report Please Click on the pdf File Below.