France: Country fact sheet
- Content Type
- Country Data and Maps
- Economist Intelligence Unit
- No abstract is available.
- Summary, Economy, Background, Fact sheet
- Political Geography
Annual data 2020 a Historical averages (%) 2016-20 Population (m) 65.3 Population growth 0.3 GDP (US$ bn; market exchange rate) 2,597 b Real GDP growth -0.4 GDP (US$ bn; purchasing power parity) 3,195 b Real domestic demand growth 0.0 GDP per head (US$; market exchange rate) 39,789 Inflation 1.1 GDP per head (US$; purchasing power parity) 48,953 Current-account balance (% of GDP) -1.0 Exchange rate (av) €:US$ 0.88 b FDI inflows (% of GDP) 1.5 aEconomist Intelligence Unit estimates. bActual.
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Background: The political foundations of contemporary France go back to the 1789 revolution. France was a founder member of the EU and has been in the vanguard of European integration. French voters have become gradually more sceptical towards the EU over a period stretching back to the 1990s. However, Euroscepticism now seems to be (at least partly) receding, owing to the difficult exit of the UK from the bloc. The French economy is in competition with that of the UK to be the second largest in western Europe and is about three-quarters the size of the German economy.
Political structure: The constitution of the Fifth Republic came into force in early 1959. The president is elected by universal suffrage for a five-year term. Parliament comprises two chambers: the Senate (the upper house), members of which are elected by an electoral college and serve for six years (with half retiring every three years); and the more important National Assembly (the lower house), to which deputies are elected by universal suffrage and which serves a five-year term, although it may be dissolved by the president. After the 2017 presidential election, the centre-left government was replaced by a centrist cabinet comprising ministers from the left and the right.
Policy issues: The main policy challenge at present is to manage the economic damage caused by the coronavirus pandemic and the containment measures taken to slow its spread. The government has announced emergency fiscal spending, including on wage subsidies, and state-backed loans to support businesses. The crisis has made progress on other structural issues, such as reducing unemployment and improving the public finances, much more difficult. Since 2017 Emmanuel Macron, the president, has passed reforms to the labour market, the tax system and social welfare owing to his party's solid parliamentary majority, with resistance coming primarily from the public and trade unions.
Taxation: The tax burden is well above the EU average, but is being reduced. The government is progressively lowering the corporation tax rate, which stands at 28% in 2020 for companies registering up to EUR500,000 in profits and 31% for companies with higher profits, with all companies to be eligible for a final rate of 25% in 2022 (below the EU average of 28%). The standard rate of value-added tax (VAT) is 20%, with reduced rates widely applicable. The top rate of income tax is 45%.
Foreign trade: France is the world's fifth-largest exporter of goods and services. It typically records surpluses on the services and primary income balances, and deficits on the trade and secondary income accounts. In 2019 the current-account deficit came to US$18.4bn, or 0.7% of GDP, with the trade deficit at US$52.6bn. Germany is France's largest trade partner.
Major exports 2019 % of total Major imports 2019 % of total Machinery & transport equipment 39.0 Machinery & transport equipment 37.7 Chemicals & related products 18.9 Chemicals & related products 13.5 Food, drinks & tobacco 11.7 Mineral fuels, lubricants & related materials 10.4 Mineral fuels, lubricants & related materials 3.1 Food, drinks & tobacco 9.0 Leading markets 2019 % of total Leading suppliers 2019 % of total Germany 13.9 Germany 18.2 US 8.3 Belgium 10.1 Italy 7.5 Italy 8.4 Spain 7.5 Netherlands 8.2
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