France: Economic and Political Overview
France is ranked as the world’s seventh-largest economic power (IMF, 2026). In 2025, France's GDP grew by 0.8%, after 1.5% in 2024. Household investment stabilised (-0.2%) after high interest rates and low confidence drove a 9.8% decline in 2024. Business investment edged back up 0.4% despite low capacity utilization and weak demand. Public support faded, with collective public consumption falling (-0.3%) and public investment slowing (+2.6%). In 2025, a contractionary fiscal stance was the main brake on activity (INSEE). Private investment remained weak due to the delayed impact of accommodative monetary policy and ongoing economic uncertainty. Private consumption benefited from disinflation and rising real wages. In 2026, economic activity is projected to hold steady, with GDP growth reaching 0.8% before picking up to 1.1% in 2027, supported by lower fiscal adjustments and falling credit costs. Growth will be driven by net exports, notably aeronautics and defence, as higher energy prices weigh on real disposable incomes and private consumption stays subdued.
Concerning public finances, the fiscal deficit was estimated at 5.1% of GDP in 2025, down from 6.1% in 2024. Announced fiscal consolidation measures for 2025 amount to 1.4% of GDP, but projections assume a lower effort, with a structural adjustment of the primary balance of 1% of GDP in 2025 and 0.5% in 2026 (data OECD). In 2026, the general government deficit is projected to reach 5.1% of GDP, before widening to 5.7% in 2027 as some revenue measures are set to expire. The revenue-to-GDP ratio is expected to decline by about ¼ pps, while the expenditure ratio will decrease only slightly. Interest payments are forecast to rise by 0.3 pps. After years of increase, public debt was estimated at 115.6% of GDP in 2025. It is expected to continue increasing gradually, reaching 118.1% in 2026 and 120.2% in 2027 (EU Commission). This rise is primarily driven by high primary deficits and growing interest payments, while the debt-reducing effect from nominal growth is anticipated to be more moderate than in previous years. Inflation fell further in 2025, averaging 0.8% over the year, primarily driven by lower energy and food prices, along with a slowdown in services prices. A marked increase is expected in 2026 due to base effects and an energy price shock. Energy price growth is forecast to drive headline inflation up in 2026, reversing the electricity price declines recorded in 2025. Average inflation came in at 0.9% in 2025, rising to 2.4% in 2026 before easing to 1.8% in 2027, returning to the ECB target.
The labour market held up in 2025 but deteriorated through 2026. The unemployment rate rose by 0.2 percentage points to 8.3% in Q2 2026, well above its 2008 low, while payroll employment fell by 0.2% over 2025. According to data from INSEE, in Q2 2026, the unemployment rate for France excluding Mayotte reached 8.3%, after 8.1% in the previous quarter and 7.5% one year earlier. Payroll employment is expected to keep falling in 2026 (-0.4%, after -0.2% in 2025) as the impact of apprenticeship contracts diminishes, hours worked return to 2019 levels, and labour productivity recovers. The unemployment rate is projected to rise further to 8.3% in 2026 and 8.7% in 2027, after 7.7% in 2025 (EU Commission). On average, French citizens enjoy a high GDP per capita (PPP), estimated at USD 63,975 in 2025 by the World Bank. Nevertheless, inequalities persist and according to Eurostat 18.6% of the population was at risk of poverty or social exclusion in 2025 (slightly above the EU average of 17.1%).
| Main Indicators | 2025 | 2026 (E) | 2027 (E) | 2028 (E) | 2029 (E) |
| GDP (billions USD) | 3,368.93 | 3,596.09 | 3,672.07 | 3,775.71 | 3,888.62 |
| GDP (Constant Prices, Annual % Change) | 0.9 | 0.9 | 0.9 | 1.2 | 1.2 |
| GDP per Capita (USD) | 48,930 | 52,083 | 53,035 | 54,379 | 55,849 |
| General Government Balance (in % of GDP) | -5.1 | -4.9 | -4.8 | -4.3 | -3.8 |
| General Government Gross Debt (in % of GDP) | 116.0 | 118.4 | 120.5 | 121.1 | 121.3 |
| Inflation Rate (%) | 0.9 | 1.8 | 1.7 | 1.9 | 1.9 |
| Unemployment Rate (% of the Labour Force) | 7.6 | 7.9 | 7.9 | 7.7 | 7.5 |
| Current Account (billions USD) | -14.82 | -12.05 | -7.48 | 8.39 | 13.66 |
| Current Account (in % of GDP) | -0.4 | -0.3 | -0.2 | 0.2 | 0.4 |
Source: IMF – World Economic Outlook Database, Latest data available
France is the largest agricultural power in the European Union, accounting for almost one-fourth of the EU’s total agricultural production. Nevertheless, the agricultural sector only represents a very small part of the country's GDP (1.3%) and employs 3% of the population (World Bank, latest data available). Wheat, corn, meats and wine are France's main agricultural products. The number of French farms has been divided by four in fifty years: there were more than 1.5 million in 1970, whereas nowadays they are less than 400,000, with an average farm size of 69 hectares. France dominates the global wine industry as the largest producer—accounting for roughly 20% of world output at around 48 million hectoliters annually—and stands as a top exporter with export revenues in the billions (EUR 15.6 billion in 2024). INEE’s first estimates for 2024 agricultural accounts indicate a 7.5% decline in production, driven by lower prices and volume. Crop production was expected to drop 6.8% in volume due to adverse weather, with prices falling by 6.8%, leading to a 13.1% decrease in crop value. Animal production decreased by an estimated 1.4%, with prices dropping 2.3%, partly offset by a slight volume increase of 0.9%. Intermediate consumption was forecast to fall by 8.0%, with a price drop allowing for a slight volume recovery. As a result, gross value added per worker in real terms declined by 7.7% in 2024, following a 9.6% decrease in 2023.
France's manufacturing industry is highly diversified; however, the country is currently undergoing a de-industrialisation process, which has resulted in the outsourcing of many activities. Nowadays, industry represents 16.8% of GDP and employs almost a fifth of the active workforce (World Bank). While services dominate the French economy, industry remains crucial. Traditional powerhouses like aerospace (Airbus), automotive (Peugeot, Renault), and luxury goods (LVMH) thrive alongside food & beverage (renowned cheeses, wines) and chemicals/pharmaceuticals (Sanofi). Emerging sectors like digital industries, renewable energy, and green industries are gaining traction with government support. Competition, rapid technological change, and stricter environmental regulations pose challenges, but France's industrial sector, rich in innovation and manufacturing expertise, is well-positioned to adapt and remain a global force. According to official preliminary figures, French manufacturing output in the fourth quarter of 2024 was 1.9% lower than in the same period of 2023, while production across all industries was 1.2% lower.
The tertiary sector represents 70.9% of the French GDP and employs 78% of the active workforce (World Bank). France is the leading tourist destination in the world: in 2024, over 100 million international visitors visited the country (+2 million y-o-y), generating around EUR 71 billion in international revenue (+12% - data Ministry of Economy). According to the European Banking Federation, financial activities made up 3.2% of total value added in France in 2023, with around 60% attributed to the banking sector. The banking industry employed 355,100 people by the end of 2023, with 326 banks operating within the industry, of which four are recognized by the Financial Stability Board as part of the eight Euro area Global Systemically Important Banks (G-SIBs).
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
| Employment By Sector (in % of Total Employment) | 2.3 | 19.3 | 78.3 |
| Value Added (in % of GDP) | 1.4 | 16.8 | 70.9 |
| Value Added (Annual % Change) | 6.9 | -0.6 | 0.9 |
Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.
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The business rankings model measures the quality or attractiveness of the business environment in a series of countries. It examines separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.
Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024
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