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Economy
France is classed as a very rich country, the GNP
per capita was 22,380 US dollars in
1999.
The economic
conjuncture is the most favourable that the country
has known for the last ten years : the internal
demand has grown, so have exports and orders :
French industry is working at 87% of its production
capacity.
The continuing low
rate of inflation makes French products more
competitive and contributes to the rise in the
internal household purchasing power. The
unemployment rate has fallen (but is still higher
than the European average), which is also a help in
keeping up internal consumption. 500,000 jobs were
created in 2000, an all time record. Consumption
went over 5,000 billion francs (55% of the GDP),
and the deductions for petrol (with the price
hike), which caused the purchasing power to drop,
will gradually dissipate.
Foreign investors
are attracted by the high level of productivity,
the central position of France in western Europe
and by its efficient communication
network.
All these good
results make the management of the economy that bit
easier for the government, the Minister of Finance
aims at having a "zero deficit in the budget" in
2004, something which has not happened in France
for the last twenty years.
The French economy
presents some particularities compared to the
neighbouring countries : the amounts deducted from
revenues are over 50% of the GDP. This is by far
the highest rate in the seven major industrial
countries (France, USA, Japan, Germany, Italy, UK,
Canada). These large deductions go hand in hand
with social problems if ever the government try to
reduce social benefits, and at the same time the
administrative regime for the social benefits
registers a regular deficit.
25% of the French
working force work in administrative services
(compared to 13% in the other G7 countries).
Individual salary
rises have been limited following the petrol price
hike, on average monthly salaries have risen by
1.9% over the year, but income tax reductions
should raise the income available to households. It
is the household in fact who will benefit the most.
Income taxes will be lowered by nearly 50 billion
francs over three years, 28.7 billion in 2001 and
12 billion francs in 2002. All the salary levels
will benefit from a reduction. Also the car road
tax has been stopped, which is a loss to the State
of 12 billion francs.
The 35 hour working
week will come into effect for companies with
twenty employees and under on 1st January 2002, the
bigger companies have been obliged to follow the 35
hour law since 2000.
Economic
statistics
|
|
1997
|
1998
|
1999
|
2000
|
|
economic
growth (%)
|
2.0
|
3.4
|
2.4
|
3.1
|
|
consumption
(variation)
|
0.2
|
3.6
|
2.3
|
2.7
|
|
investment
(variation)
|
0.5
|
6.1
|
6.5
|
5.2
|
|
inflation
(%)
|
1.4
|
0.7
|
0.8
|
1.2
|
|
public
balance/GDP (%)
|
-3.0
|
-2.7
|
-2.2
|
-1.7
|
|
rate of
unemployment
|
12.5
|
11.8
|
11.1
|
9.2
|
|
short term
interest rate
|
3.5
|
3.6
|
2.9
|
3.3
|
|
exports
(variation)
|
10.6
|
6.9
|
1.8
|
6.3
|
|
imports
(variation)
|
6.4
|
9.4
|
2.2
|
5.5
|
|
balance of
trade (billions of $)
|
28.1
|
26.1
|
20.1
|
19.2
|
|
current
balance (billions of $)
|
37.6
|
40.2
|
34.3
|
34.2
|
|
public
debt/GDP
|
64.5
|
64.9
|
65.2
|
64.6
|
General information
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Gross
national product 1999
|
1322.34
billion $
|
|
GNP per
capita
|
22,380
dollars
|
|
Tourist
revenue
|
29.931
billion $
|
|
Economic
growth 1990-1999
|
1.7%
|
|
Aid
1998
|
-8.402
billion $
|
|
Foreign
investment 1999
|
40.914
billion $
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Division
of GDP by activity sector :
Agriculture : 2.3%
Industry : 19.3%
Mining : 6.9%
Services : 71.5%
Over
70% of French exports go to western Europe. They
increased by 13.3% in 2000 and imports increased by
15%. The biggest market is Germany, followed by
Great Britain. Exports to the United States shot up
by 25.7% during the first nine months of the
year.
(source MOCI,
Le Monde)
Agriculture
2% of the
French labour force is employed in agriculture,
which contributes 3% of the GNP.
France is the leading agricultural nation in the
European Union and the major benificiary of aid
from Brussels in this domain. It is the second in
the world after the United States, the biggest
producer of sugar beet in the world and the second
biggest exporter of cereals.
The volume of agricultural production went up by
2.4% in 1999, except for cereals which dropped by
5.4%, due to the land freezing insisted on by the
communal agricultural policy (the PAC), but for the
first time since 1993 the average income dropped by
4% in 1999 with the bottom dropping out of market
prices for several products. The only domain
escaping the drop was wine production.
A storm devastated
forests on 26th and 27th December 1999. Forests in
France cover 16.5 million hectares and increase
their volume by 18,000 hectares every year. About
40 million cubic meters of timber are produced each
year. Following the storm, 1378 million cubic
meters of timber had fallen, only 55% of that could
be recuperated and sold and prices fell to one
third of their former level.
The ESB crisis, the
"Mad Cow" disease, has caused a general drop in the
price of beef in Europe. The banning of the use of
animal flour in fodder has on the other hand caused
a rise in the consumption of other protein based
foodstuffs, where the only question is whether or
not they are genetically modified! This crisis,
apart from the changes in consumer behaviour which
it implies, risks to also cause an evolution in the
communal agricultural policies towards a less
productive model.
Agriculture
in France
(in
millions of tons, head, m³ for timber)
|
Production
|
1996
|
1997
|
1998
|
1999
|
Rating
|
|
wheat
|
35.949
|
33.847
|
39.793
|
37.050
|
4
|
|
wood
|
40.443
|
41.116
|
42.770
|
-
|
13
|
|
maize
|
14.530
|
16.832
|
15.204
|
15.160
|
5
|
|
barley
|
9.519
|
10.124
|
10.591
|
9.542
|
4
|
|
potatoes
|
6.249
|
6.690
|
6.053
|
6.475
|
11
|
|
rice
|
0.115
|
0.121
|
0.107
|
0.101
|
-
|
|
wine
|
6.004
|
5.510
|
5.445
|
6.265
|
1
|
|
cattle
|
20.661
|
20.664
|
20.371
|
20.214
|
13
|
|
sheep
|
10.556
|
10.463
|
10.316
|
10.240
|
26
|
|
pigs
|
14.530
|
14.976
|
14.501
|
16.190
|
9
|
|
fishing
|
0.847
|
0.830
|
-
|
-
|
21
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Industry
France used to have an important mining industry,
producing coal, salt, iron, uranium and potassium.
Most of the mines are now abandonned or about to be
: coal mining will be definitively stopped in 2005.
At present there is the problem of managing this
reconversion : according to tax records, the mining
communities are always 30% poorer than
others.
On the other hand
France has a diversified manufacturing industry :
the most important sector is machine tools and
transport material (automobiles), followed by
foodstuffs due to the vast agricultural production.
Industrial activity profited in 1999 from the
depreciation of the Euro and the rise in the sales
of intermediary goods and equipment.
The dynamism and
the high competitivity of the aeronautic, the
automobile and the foodstuff industries have
contributed to the balance of trade surplus.
Between April 2000 and April 2001 the Air France
group took on 4500 new people, a number equivalent
to 7% of their total staff.
This is less a consequence of the 35 hour working
week than of the growth of the company's activity,
the occupation rate of the planes is presently over
80%.
Airbus had an
excellent year in 2000, with a total sale of 496
planes and 50 orders for the A380 which will be in
the 2001 results. 2001 will be the year of the very
big planes, the Airbus salemen have managed to sell
50 of them in less than 6 months to the first six
customers.
The orders should accumulate by 2004, when the
first flights take place.
The building and
the automobile industries are benefitting fully
from the boom in the economy : 2.3 million cars
were sold in France in the first six months of
2000, a new record.
In building and
public works the job offers rose by 32%, the sector
profited from the pre-election period (municipal
elections in 2001) which is always good for public
works.
All the activities in this sector recorded an
appreciable growth.
Housing was helped by the Perissol depreciation
allowance, the low interest rates, the improvement
in the employment situation and a catching-up
phenomenon.
Renovation works profit from the lowering of the
VAT.
Production in the
textile and clothing industries has fallen.
Redundancies and relocations continue.
Large scale distribution groups have suffered less,
with the strong consumer demand, they have
diversified their suppy sources to get better
prices.
The big
supermarkets have also recorded an increase, due
mainly to non-foodstuff sales.
The big stores were the main beneficiaries in the
return to a state of prosperity.
The popular stores are multiplying and have managed
to drop lower quality goods from their
activity.
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