French architecture in France

France Economic Forecast

France Economic Outlook

GDP growth accelerated to 0.5% on a seasonally adjusted quarter-on-quarter basis in Q2, marking the best result since Q3 2021 and coming in well above market expectations. Recoveries in exports and investment underpinned the reading, more than offsetting a fall in private consumption. Exports likely got a boost from rising electricity and car exports, but they were flattered by the delivery of a cruise ship. Meanwhile, sticky inflation, subdued consumer confidence and social unrest likely weighed on private spending. Turning to Q3, the economy is set to slow on a likely pullback in exports following Q2’s bumper expansion. Available data is fairly downbeat, with the composite PMI—an indicator that measures operating conditions in the manufacturing and services sectors—at the joint-lowest level in nearly three years in July–August.

France Inflation

Harmonized inflation came in at 5.1% in July, down from June’s 5.3% and marking the lowest inflation rate since February 2022. The result was driven by moderating price pressures for food and non-alcoholic beverages, housing and utilities and recreation. Inflation is set to ease further by the end of the year on higher interest rates and a more challenging base effect.

This chart displays Economic Growth (GDP, annual variation in %) for France from 2013 to 2022.

France Economic Data

2018 2019 2020 2021 2022
Population (million) 64.8 65.1 65.3 65.5 65.6
GDP (EUR bn) 2,365 2,440 2,317 2,500 2,638
GDP per capita (EUR) 36,470 37,486 35,497 38,191 40,189
Economic Growth (Nominal GDP, ann. var. %) 2.8 3.2 -5.1 7.9 5.5
Economic Growth (GDP, ann. var. %) 1.8 1.9 -7.7 6.4 2.5
Domestic Demand (ann. var. %) 1.4 2.2 -6.4 6.0 3.1
Private Consumption (ann. var. %) 1.0 1.8 -6.7 5.1 2.1
Government Consumption (ann. var. %) 0.8 1.0 -4.2 6.5 2.6
Fixed Investment (ann. var. %) 3.2 4.1 -7.0 10.2 2.3
Exports (G&S, ann. var. %) 4.5 1.6 -17.1 10.7 7.4
Imports (G&S, ann. var. %) 2.9 2.5 -12.6 9.1 8.8
Industrial Production (ann. var. %) 0.7 0.6 -10.6 5.7 -0.1
Retail Sales (ann. var. %) 2.9 2.7 -2.4 10.3 3.3
Disposable Income (ann. var. %) 3.1 3.4 1.2 4.2 5.1
Unemployment (% of active population, eop) 8.8 8.2 7.9 7.4 7.2
Unemployment (% of active population, aop) 9.0 8.4 8.0 7.9 7.3
Fiscal Balance (% of GDP) -2.3 -3.1 -9.0 -6.5 -4.7
Public Debt (% of GDP) 97.8 97.4 114.6 112.9 111.8
Inflation (CPI, ann. var. %, eop) 1.6 1.5 0.0 2.8 5.9
Inflation (HICP, ann. var. %, eop) 1.9 1.6 0.0 3.4 6.7
Inflation (HICP, ann. var. %, aop) 2.1 1.3 0.5 2.1 5.9
Inflation (Core, ann. var. %, aop) 0.8 0.8 0.6 1.1 3.9
Inflation (PPI, ann. var. %, aop) 2.7 0.4 -2.2 9.3 25.5
ECB Refinancing Rate (%, eop) 0.00 0.00 0.00 0.00 2.50
ECB Overnight Deposit Rate (%, eop) -0.40 -0.50 -0.50 -0.50 2.00
3-Month EURIBOR (%, eop) -0.31 -0.38 -0.55 -0.57 2.13
10-Year Bond Yield (%, eop) 0.71 0.11 -0.36 0.20 3.10
Stock Market (var. of CAC 40 %) -11.0 26.4 -7.1 28.9 -9.5
Exchange Rate (USD per EUR, eop) 1.14 1.12 1.22 1.14 1.07
Exchange Rate (USD per EUR, aop) 1.18 1.12 1.14 1.18 1.05
Current Account Balance (EUR bn) -19.6 12.5 -37.5 9.0 -53.9
Current Account Balance (% of GDP) -0.8 0.5 -1.6 0.4 -2.0
Merchandise Trade Balance (EUR bn) -51 -47 -58 -67 -137
Foreign Direct Investment (EUR bn) 36.6 11.7 9.3 27.2 34.1

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