The Dive

The Economy of France - Industry & Market Trends in 2023

Last Updated: May 2, 2023


What is The Overall Outlook in France?

France is the sixth-largest economy in the world, and its territories (including colonies) span across Western Europe, the Americas, the Atlantic Ocean, the Pacific Ocean, and the Indian Ocean. This geographical dispersion of land also allows France to have an exclusive economic zone that is roughly the same size as the United States.

Furthermore, France is located in one of the most advantageous positions in Europe, with five major rivers that provide balanced distribution of resources. This, combined with favorable soil quality, makes agriculture a thriving industry in France despite its highly industrialized state.

France operates under a semi-presidential system with two leaders. The first is the President of the Republic, who is directly elected by the public and serves a five-year term. The current President is Emmanuel Macron. The second is the Prime Minister, who is appointed by the President and serves as the head of government. The current Prime Minister is Élisabeth Borne.

However, the strong presence of trade unions in France has resulted in a relatively underdeveloped business and market system compared to many advanced economies. President Macron successfully pushed for labor and tax reforms in 2017-2018 despite opposition from the public and unions, making it easier for companies to hire and lay off employees. However, with the parliamentary elections held in mid-2022, President Macron’s party lost the majority, making future legislative progress more challenging.

Under the current impact of the Russo-Ukrainian War, energy and food costs have risen significantly. The French government has implemented policies to address this, including limiting energy price increases to 15% in 2023, which is expected to cost the government up to 16 billion euros. The government has also increased financial support for industries such as businesses and farmers since 2021. Additionally, since the beginning of the pandemic, France has launched a 100 billion euro stimulus program to encourage energy, high-tech, and manufacturing companies to return and develop in the country.

Table of Contents
Real GDP Growth(%)|Data After 2023 is forecasted by IMF
GDP Per Capita (Current $)|Data After 2023 is forecasted by IMF

Economic Structure

France - Economic Structure & Forecast

GDP Data is updated in January, 2023. Figures below represent GDP contribution with the expenditure approach by segment. Data is sourced from World Bank, IMF, and local government and refactored by our team. Forecasted data is from EIU.

Private Consumption
Government Expenditure
Capital Formation
Net Export

Economy Outlook

Economic Snapshot of France

The French economy showed a quick recovery from the pandemic recession but lost steam in 2022 despite the government’s efforts to mitigate the effects of rising energy prices. Indicators suggest that the economy is not on the brink of a recession, in part due to positive developments in the energy sector. The job market remains tight, with fewer job seekers and continued job creation, albeit at a slower pace. Consumer confidence rebounded in the latter part of 2022, and supply chain issues have improved, with delivery delays now at their lowest in two years and companies working through backlogs of orders. However, business sentiment is negative and with weakening activity in the services sector due to declining consumer purchasing power, this trend is expected to persist.

The economy is expected to grow by less than 0.4-0.7% in 2023. Economic growth will be hindered by high inflation, affecting consumers’ purchasing power; tightening monetary policy with rising interest rates in the euro zone; and a subdued global environment with slowing growth in the US and globally. The winter of 2023/24 presents additional risks for energy supplies, as Europe will need to replenish its depleted gas storage without the usual inflow from Russia, and with new LNG terminals coming online gradually. Semiconductors will continue to be in short supply in 2023, and although food and energy prices will start to stabilize, they will remain exceptionally high due to increased global demand for LNG following the easing of zero-covid protocols in China. Elevated inflation will continue to impact private consumption, and higher interest rates will dampen investment spending and put pressure on low-margin companies. France will also feel the effects of slower growth in the US in the context of monetary policy tightening.

Unemployment Rate(%)|Forecasted data for after 2023
Inflation Rate(%)|Forecasted data for after 2023

Industry Structure

France - Industry Breakdown & Forecast

GDP Data is updated in January, 2023. Figures below represent GDP contribution with the expenditure approach by segment. Data is sourced from World Bank, IMF, and local government and refactored by our team. Forecasted data is from EIU.

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Demographic Outlook

Demographic Outlook in France

The majority of France’s territories and population are located in metropolitan France in Western Europe, according to population statistics from the French National Institute of Demographic Studies (INED) and the National Institute of Statistics and Economic Studies (INSEE). As of January 1st, 2021, 65.25 million people lived in metropolitan France and 2.785 million lived in overseas France, with a total population of 68.035 million in the French Republic. France has a relatively high fertility rate compared to other countries in the EU, with a rate of 1.85, which has been declining in recent years, similar to other highly developed countries.

Paris is France’s largest city and capital. The city of Paris covers just 40 square miles, with a population of over 2 million within its urban area, making it the most populous city region in the entire EU. The city has a population density of over 21,000 per square kilometer in the urban area.

Racial Profile

Celtic and Latin with Teutonic, Slavic, North African, Indochinese, Basque minorities

Languages Used

French (official) 100%, declining regional dialects and languages (Provencal, Breton, Alsatian, Corsican, Catalan, Basque, Flemish, Occitan, Picard)

Religions Practiced

Roman Catholic 47%, Muslim 4%, Protestant 2%, Buddhists 2%, Orthodox 1%, Jewish 1%, other 1%, none 33%, unspecified 9%

Population Structure

France - Population Pyramid

Political Outlook

Political Outlook & Policy Trends in France

The political foundations of France can be traced back to the French Revolution of 1789. The country was a founding member of the European Union (EU) and has been a leading player in European integration. However, over the years, French voters have become increasingly skeptical about the EU, but this skepticism appears to be declining due to the difficulties faced by the UK in leaving the bloc. The French economy is in competition with that of the UK to become the second largest in western Europe and is about three-quarters the size of the German economy.

The constitution of the Fifth Republic was established in 1959. The president is elected through universal suffrage for a five-year term. The parliament is divided into two chambers: the Senate (upper house) and the National Assembly (lower house). The Senate members are elected by an electoral college and serve for six years, with half retiring every three years, while the National Assembly members are elected through universal suffrage and serve a five-year term, although it can be dissolved by the president. After the outcome of the June 2022 legislative elections, in which the president Emmanuel Macron lost his parliamentary majority, he reshuffled his cabinet.

The government’s main policy priority is to address the rising prices of energy and food by capping energy price increases and providing financial support to consumers, businesses, and farmers. The government is also implementing a €100 billion recovery plan to bring back the production of essential manufactured goods to France, which will increase investment. Since 2017, Emmanuel Macron has passed reforms to the labor market, tax system, and social welfare, which have faced resistance from the public and trade unions.

2022 French Legislative Election (National Assembly)
Note: No Left–Right Categorization
Current Account Balance (% of GDP)|Forecasted data for after 2023
Government Debt (% of GDP)|Forecasted data for after 2023

Foreign Policy

Trade & Foreign Investment In France

Export (Million Dollars | Nominal)
Export - Percentage of World (‱)
Foreign Direct Investment (Million Dollars | Nominal)
FDI - Percentage of World (‱)

Consumer Outlook

France - Consumer & Market Outlook

We work with 3rd party data offices and our experts network to deliver the most comprehensive retail & consumer behavior landscape there is.

E-Commerce Development, Penetration, Trends & Outlook in France

Social Media Development, User Demographics, Platforms, and Trends in France

  • Economic Data:OECD, World Bank, IMF、Government Statistics Bureau
  • Currency Exchange:Based on IMF data in 2023/1
  • GDP Growth Projection:OECD、IMF, OECD, EIU、Government Bureau
  • Demographics:UN Population Database
  • Race, Culture, and Languages:CIA Factbook
  • Unemployment Rate Projection:ILO, UNECE
  • Trade:UN Comtrade, UNCTD
  • ICT Infrastructure:ITU
  • Data Calculation &
  • Analysis:OOSGA Analytics
Author: Economic Team, FR Team

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