French architecture in France

France Economic Forecast

France Economic Outlook

Quarter-on-quarter GDP growth slowed in Q3 due to destocking and a contraction in exports. On the flip side, domestic demand—barring inventories—strengthened amid lower inflationary pressures. Shifting to the last quarter of the year, momentum likely remains subdued. Economic sentiment weakened in October amid a worsening backdrop in the industrial, construction and retail sectors. Moreover, in the same month, the manufacturing PMI posted its sharpest contraction since May 2020. More positively, October services data painted a less downbeat picture of the sector. In other news, in mid-November, the government reached an agreement with state-owned nuclear producer EDF on future energy costs. The deal includes a windfall tax in the event of a price surge with the aim of shielding households and businesses.

France Inflation

Harmonized inflation fell to 4.5% in October from September’s 5.7% on softer price pressures for food and transportation. Inflation is seen declining in the coming quarters as the effect of monetary tightening fully filters through the economy. That said, it is forecast to remain above the 2.0% ECB target through end-2024. Commodity price spikes pose an upside risk.

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 35,498 38,190 40,189
Economic Growth (Nominal GDP, ann. var. %) 2.8 3.2 -5.1 7.9 5.6
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 -12.7 9.1 8.8
Industrial Production (ann. var. %) 0.7 0.6 -10.6 5.7 -0.2
Retail Sales (ann. var. %) 2.9 2.7 -2.4 10.3 3.4
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 -4.8
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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