France: Economic and Political Overview
France is ranked as the world’s seventh-largest economic power (IMF, 2024). In 2024, France's GDP grew by 1.1%, matching 2023's rate. Household investment dropped 6% due to high interest rates and low confidence, following an 8.2% decline in 2023. Business investment fell 1.6% amid low capacity utilization and weak demand. Growth was driven by public consumption (+2.1%) and public investment (+3.3%). In 2025, a contractionary fiscal stance is expected to limit real GDP growth to 0.8% (IMF). Private investment will remain weak due to the delayed impact of accommodative monetary policy and ongoing economic uncertainty. Private consumption will benefit from disinflation and rising real wages. In 2026, economic activity is projected to pick up, with GDP growth reaching 1.1%, supported by lower fiscal adjustments and falling credit costs. Growth will be driven by private domestic demand, as the saving rate declines and private investment benefits from monetary easing.
Concerning public finances, the fiscal deficit was estimated at 6.1% of GDP in 2024, up from 5.5% in 2023. Announced fiscal consolidation measures for 2025 amount to 1.4% of GDP, but projections assume a lower effort, with a structural adjustment of the primary balance of 1% of GDP in 2025 and 0.5% in 2026 (data OECD). In 2026, the general government deficit is projected to reach 5.5% of GDP, as some revenue measures from 2025 are set to expire. The revenue-to-GDP ratio is expected to decline by about ¼ pps, while the expenditure ratio will decrease only slightly. Interest payments are forecast to rise by 0.3 pps. After falling to 109.9% of GDP in 2023, public debt was estimated to rise to 112.3% in 2024. It is expected to continue increasing gradually, reaching 117.6% in 2026 (IMF). This rise is primarily driven by high primary deficits and growing interest payments, while the debt-reducing effect from nominal growth is anticipated to be more moderate than in previous years. Inflation gradually decreased in 2024, reaching 1.5% in October, primarily driven by lower energy and food prices, along with a slowdown in services prices. A slight increase is expected in 2025 due to base effects and rising food prices. Energy price growth is forecast to further moderate (+0.8%) in 2025, with electricity prices declining. Average inflation for 2024 is expected to be 2.4%, easing to 1.9% in 2025 and 1.8% in 2026, remaining below the ECB target.
The labour market remained strong in Q1 2024 but slowed in Q2. The unemployment rate fell by 0.2 percentage points to 7.3% in Q2 2024, close to its lowest since 2008, while the employment rate reached a record high of 74.7%. According to data from INSEE, in Q4 2024, the number of unemployed people fell by 63,000 from the previous quarter, reaching 2.3 million, resulting in an unemployment rate of 7.3% for the year. Employment growth is expected to slow in 2025 and 2026 (+0.1% and +0.4%, respectively, after +0.5% in 2024) as the impact of apprenticeship contracts diminishes, hours worked return to 2019 levels, and labour productivity recovers. The unemployment rate is projected to gradually rise to 7.5% in 2025 and 7.6% in 2026 (EU Commission). On average, French citizens enjoy a high GDP per capita (PPP), estimated at USD 67,658 in 2024 by the IMF. Nevertheless, inequalities persist and according to Eurostat one-fifth of the population was at risk of poverty or social exclusion at the end of 2023 (just below the EU average).
| Main Indicators | 2023 (E) | 2024 (E) | 2025 (E) | 2026 (E) | 2027 (E) |
| GDP (billions USD) | 3,052.71 | 3,174.10 | 3,283.43 | 3,398.06 | 3,500.28 |
| GDP (Constant Prices, Annual % Change) | 1.1 | 1.1 | 0.8 | 1.1 | 1.4 |
| GDP per Capita (USD) | 46,305 | 48,012 | 49,527 | 51,113 | 52,503 |
| General Government Balance (in % of GDP) | -4.9 | -5.5 | -5.5 | -5.5 | -5.7 |
| General Government Gross Debt (in % of GDP) | 109.9 | 112.3 | 115.3 | 117.6 | 119.8 |
| Inflation Rate (%) | 5.7 | 2.3 | 1.6 | 1.8 | 1.8 |
| Unemployment Rate (% of the Labour Force) | 7.4 | 7.4 | 7.2 | 7.1 | 7.0 |
| Current Account (billions USD) | -30.40 | 2.88 | -3.95 | -12.00 | -14.57 |
| Current Account (in % of GDP) | -1.0 | 0.1 | -0.1 | -0.4 | -0.4 |
Source: IMF – World Economic Outlook Database, October 2021
France is the largest agricultural power in the European Union, accounting for almost one-fourth of the EU’s total agricultural production. Nevertheless, the agricultural sector only represents a very small part of the country's GDP (1.7%) and employs 3% of the population (World Bank, latest data available). Wheat, corn, meats and wine are France's main agricultural products. The number of French farms has been divided by four in fifty years: there were more than 1.5 million in 1970, whereas nowadays they are less than 400,000, with an average farm size of 69 hectares. France dominates the global wine industry as the largest producer—accounting for roughly 20% of world output at around 48 million hectoliters annually—and stands as a top exporter with export revenues in the billions (EUR 15.6 billion in 2024). INEE’s first estimates for 2024 agricultural accounts indicate a 7.5% decline in production, driven by lower prices and volume. Crop production was expected to drop 6.8% in volume due to adverse weather, with prices falling by 6.8%, leading to a 13.1% decrease in crop value. Animal production decreased by an estimated 1.4%, with prices dropping 2.3%, partly offset by a slight volume increase of 0.9%. Intermediate consumption was forecast to fall by 8.0%, with a price drop allowing for a slight volume recovery. As a result, gross value added per worker in real terms declined by 7.7% in 2024, following a 9.6% decrease in 2023.
France's manufacturing industry is highly diversified; however, the country is currently undergoing a de-industrialisation process, which has resulted in the outsourcing of many activities. Nowadays, industry represents 18.5% of GDP and employs almost a fifth of the active workforce (World Bank). While services dominate the French economy, industry remains crucial. Traditional powerhouses like aerospace (Airbus), automotive (Peugeot, Renault), and luxury goods (LVMH) thrive alongside food & beverage (renowned cheeses, wines) and chemicals/pharmaceuticals (Sanofi). Emerging sectors like digital industries, renewable energy, and green industries are gaining traction with government support. Competition, rapid technological change, and stricter environmental regulations pose challenges, but France's industrial sector, rich in innovation and manufacturing expertise, is well-positioned to adapt and remain a global force. According to official preliminary figures, French manufacturing output in the fourth quarter of 2024 was 1.9% lower than in the same period of 2023, while production across all industries was 1.2% lower.
The tertiary sector represents 69.7% of the French GDP and employs 78% of the active workforce (World Bank). France is the leading tourist destination in the world: in 2024, over 100 million international visitors visited the country (+2 million y-o-y), generating around EUR 71 billion in international revenue (+12% - data Ministry of Economy). According to the European Banking Federation, financial activities made up 3.2% of total value added in France in 2023, with around 60% attributed to the banking sector. The banking industry employed 355,100 people by the end of 2023, with 326 banks operating within the industry, of which four are recognized by the Financial Stability Board as part of the eight Euro area Global Systemically Important Banks (G-SIBs).
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
| Employment By Sector (in % of Total Employment) | 2.5 | 19.2 | 78.2 |
| Value Added (in % of GDP) | 1.7 | 18.5 | 69.7 |
| Value Added (Annual % Change) | 4.9 | 4.5 | 0.7 |
Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.
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The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}
Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation
The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.
Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024
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