France is the world's fifth largest and wealthiest economy . It is the second largest economy in Europe in nominal terms. France's economy entered the 2008-2009 recession later and left it earlier than most comparable economies, only enduring four quarters of contraction. As of September 2010, France's economy has been growing continuously since the second quarter 2009.
France's world leading corporations
With 39 of the 500 biggest companies of the world in 2010, France ranks 4th in the Fortune Global 500, behind the USA, Japan and China, but ahead of Germany and the UK. Paris is the second most important localisation for the world's 500 biggest companies' headquarters (only to Tokyo). There is more Fortune Global 500's headquarters in Paris than in New York, London, Shangai, Beijing or Frankfurt .
French companies are ranking as leading firms in each and every major strategical economic sectors:
AXA is the world's largest insurance company; Air France is the world's largest airline company; L'Oreal is the world's biggest cosmetic company; LVMH and PPR are the world's 1st and 2nd largest luxury companies; GDF-Suez is the world's largest energy company; EDF is the world's largest utility company; Areva is the world's nuclear-energy leader; Veolia Environnement is the world's largest environmental services and water management company; VINCI, Bouygues and Eiffage are respectively world's 1st, 2nd and 4th building and public work companies; Michelin is the world's pneumatic leader; Lafarge is the world's largest cement company; JCDecaux is the world's largest outdoor advertising corporation; EADS is the world's second aerospacial company; BNP, Credit Agricole and Societe Generale are respectively the world's 1st, 6th and 8th biggest banks in assets in 2010; Total is the world's fourth largest private oil company; Danone is the world's fifth largest food company and the world's largest mineral water provider; Sanofi Aventis is the world's fifth largest pharmaceutical company; Publicis is the world's third largest advertising company...
In 2008, France was the second-largest recipient of foreign direct investment among OECD countries at $117.9 billion, above the United Kingdom ($96.9 billion), Germany ($24.9 billion), or Japan ($24.4 billion). In the same year, French companies invested $220 billion outside of France, ranking France as the second most important outward direct investor in the OECD, behind the United States ($311.8 billion), and ahead of the United Kingdom ($111.4 billion), Japan ($128 billion) and Germany ($156.5 billion) .
Rise and decline of dirigisme
France embarked on an ambitious and very successful programme of modernization under state impulse and coordination. This program of dirigisme, mostly implemented by right-wing governments between 1958-1981, involved the state control of certain industries such as transportation, energy and telecommunication infrastructures as well as various incentives for private corporations to merge or engage in certain projects.
The 1981 election of president François Mitterrand saw an short-lasting increased governmental control in the economy, nationalising many industries and private banks. This form of increased dirigisme, became heavily criticised as early as 1982. By 1983, the government decided to renounce dirigisme and start the era of rigueur ("rigour") or corporatization. As a result the government largely retreated from economic intervention; dirigisme has now essentially receded, though some of its traits remain.
Despite being a widely liberalised economy, the government continues to play a significant role in the economy: government spending, at 53% of GDP in 2001, is the highest in the G-7. Labour conditions and wages are highly regulated. The government continues to own shares in corporations in a range of sectors, including banking, energy production and distribution, automobiles, transportation, and telecommunications. These differ from countries like the U.S or U.K where most of these companies had been privatised, sometimes for the worst - see British railways.
Sectors of the economy
Leading industrial sectors in France are telecommunications (including communication satellites), aerospace and defense, ship building (naval and specialist ships), pharmaceuticals, construction and civil engineering, chemicals, and automobile production (3.5m units in 2005).
Research and development spending is also high in France at 2.26% of GDP, the fourth highest in the OECD.
Nuclear power in France
France is the world-leading country in nuclear energy, home of global energy giants Areva, EDF and GDF Suez: nuclear power now accounts for about 78% of the country's electricity production, up from only 8% in 1973, 24% in 1980, and 75% in 1990. Nuclear waste is stored on site at reprocessing facilities. Due to its heavy investment in nuclear power. France is the smallest emitter of carbon dioxide among the seven most industrialized countries in the world .
In 2006 of electricity in France amounted to 548.8 TWh, of which:
428.7 TWh (78.1%) were produced by nuclear power generation
60.9 TWh (11.1%) were produced by hydroelectric power generation
52.4 TWh (9.5%) were produced by fossil fuel power generation
21.6 TWh (3.9%) by coal power
20.9 TWh (1.1%) by natural gas power
9.9 TWh (1.8%) by other fossil fuel generation (fuel oil and gases by-products of industry such as blast furnace gases)
6.9 TWh (1.3%) were produced by other types of power generation (essentially waste-to-energy and wind turbines))
The electricity produced by wind turbines increased from 0.596 TWh in 2004, to 0.963 TWh in 2005, and 2.15 TWh in 2006, but this still accounts only for 0.4% of the total production of electricity (as of 2006).
Inflation rate 2003 1.80% 2004 2.10% 2005 2.30% 2006 1.70% 2007 1.50% 2008 1.50% 2009 2.80%
In November 2004, EDF (which stands for Electricité de France), the world's largest utility company and France's largest electricity provider, was floated with huge success on the French stock market. Notwistanding, the French State still keep 70% of the capital.
Other electricity providers include CNR (Compagnie nationale du Rhône) and Endesa (through SNET).
France is the world's second largest agricultural exporter, world's sixth-largest agricultural producer and European Union's leading agricultural power, accounting for about one-third of all agricultural land within the EU.
Northern France is characterized by large wheat farms. Dairy products, pork, poultry, and apple production are concentrated in the western region. Beef production is located in central France, while the production of fruits, vegetables, and wine ranges from central to southern France. France is a large producer of many agricultural products and is currently expanding its forestry and fishery industries. The implementation of the Common Agricultural Policy (CAP) and the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) have resulted in reforms in the agricultural sector of the economy.
As the world's second-largest agricultural exporter, France is rank just after the United States. The destination of 70% of its exports are other EU members states. France also provide agricultural exports to many poor African countries (including its former colonies) which face serious food shortage. Wheat, beef, pork, poultry, and dairy products are the principal exports.
The United States, although the second-largest exporter to France, faces stiff competition from domestic production, other EU member states, and third world countries. U.S. agricultural exports to France, totalling some $600 million annually, consist primarily of soybeans and products, feeds and fodders, seafood, and consumer oriented products, especially snack foods and nuts. French exports to the United States are much more high value products such as cheese, processed products and wine.
The French agricultural sector received almost €11 billion from EU subsidies. But France's competitive advantage is mostly linked to the high quality and global reputation of its products, among which are some of the world's most renowned agricultural productions like wine or cheese. Such world-famous productions goes a long way to create a thriving domestic sector.
Tourism in France
The Palace of Versailles is one of the most popular tourist destinations in France.
France is, by far, the world's first tourist destination with more than 81.9 million foreign tourists in 2007,, way ahead of Spain (58.5 million in 2006) and the United States (51.1 million in 2006). This 81.9 million figure excludes people staying less than 24 hours in France, such as northern Europeans crossing France on their way to Spain or Italy during the summer.
France features cities of high cultural interest (Paris being the foremost), beaches and seaside resorts, ski resorts, and rural regions that many enjoy for their beauty and tranquillity (green tourism). France also attracts many religious pilgrims to Lourdes, a town in the Hautes-Pyrénées département, that hosts a few million visitors a year.
Popular tourist sites include: (according to a 2003 ranking visitors per year): Eiffel Tower (6.2 million), Louvre Museum (5.7 million), Palace of Versailles (2.8 million), Musée d'Orsay (2.1 million), Arc de Triomphe (1.2 million), Centre Pompidou (1.2 million), Mont-Saint-Michel (1 million), Château de Chambord (711,000), Sainte-Chapelle (683,000), Château du Haut-Kœnigsbourg (549,000), Puy de Dôme (500,000), Musée Picasso (441,000), Carcassonne (362,000).
France is the fourth largest weapons supplier in the world. The French arms industry's main customer, for whom they mainly build warships, guns, nuclear weapons and equipment, is the French Government. Furthermore, record high defense expenditure (currently at €35 billion), which was considerably increased under the government of Prime Minister Jean-Pierre Raffarin, have contributed to the success of the French arms industries. In addition, external demand plays a big part in the growth of this sector: for example, France exports great quantities of weaponry to the United Arab Emirates, Brazil, Greece, India, Pakistan, Taiwan, Singapore and many others.
French exports in 2006
France is the second-largest trading nation in Europe (after Germany). Its foreign trade balance for goods had been in surplus from 1992 until 2001, reaching $25.4 billion (25.4 G$) in 1998; however, the French balance of trade was hit by the economic downturn, and went into the red in 2000, reaching US$15bn in deficit in 2003. Total trade for 1998 amounted to $730 billion, or 50% of GDP—imports plus exports of goods and services. Trade with European Union countries accounts for 60% of French trade.
In 1998, U.S.-France trade totalled about $47 billion—goods only. According to French trade data, U.S. exports accounted for 8.7%--about $25 billion—of France's total imports. U.S. industrial chemicals, aircraft and engines, electronic components, telecommunications, computer software, computers and peripherals, analytical and scientific instrumentation, medical instruments and supplies, broadcasting equipment, and programming and franchising are particularly attractive to French importers.
The principal French exports to the United States are aircraft and engines, beverages, electrical equipment, chemicals, cosmetics, luxury products and perfume. France is the ninth-largest trading partner of the U.S.
The economic disparity between French regions is not as high as that in other European countries such as the UK, Spain, Italy or Germany. However, Europe's wealthiest and largest regional economy, Ile-de-France -the region surrounding Paris-, has long profited from the capital economic hegemony.
The most important régions are Ile-de-France (world's 4th and Europe 1st wealthiest and largest regional economy), Rhône-Alpes (Europe's 5th largest regional economy thanks to its services, high-technologies, chemical industries, wines, tourism), Provence-Alpes-Côte d'Azur (services, industry, tourism and wines), Nord-Pas-de-Calais (European transport hub, services, industries) and Pays de la Loire (green technologies, tourism).
Régions like Alsace, which has a rich past in industry (machine tool) and currently stands as high income service-specialized region, are very wealthy without ranking very high in absolute term.
The rurals area are mainly in Auvergne, Limousin, and Centre, and wines productions account for a significant amount of the economy in Aquitaine (Bordeaux region), Bourgogne and champagne is produced inChampagne-Ardennes.
List of French régions ranked by GDP total and per capita.
Rank Region GDP
(in millions euros, 2005) GDP per capita
1 Île-de-France 500,870 52,712
2 Rhône-Alpes 165,034 28,131
3 Provence-Alpes-Côte d'Azur 120,365 25,693
4 Nord-Pas de Calais 86,747 21,555
5 Pays de la Loire 84,990 25,401
6 Aquitaine 76,895 25,374
7 Brittany 73,511 24,443
8 Midi-Pyrénées 67,486 25,140
9 Centre 61,968 25,005
10 Languedoc-Roussillon 53,197 21,752
11 Lorraine 53,013 22,769
12 Alsace 46,870 26,196
13 Upper Normandy 44,864 24,923
14 Picardie 41,276 22,022
15 Poitou-Charentes 39,286 23,311
16 Bourgogne 38,733 23,880
17 Champagne-Ardenne 33,550 25,093
18 Lower Normandy 33,253 23,099
19 Auvergne 30,632 23,127
20 Franche-Comté 27,016 23,782
21 Régions d'outre-mer (2002) 22,891 13,375
22 Limousin 16,326 22,664
23 Corsica 5,846 21,508
Source : INSEE.
Departements economy and cities
Departemental income inequalities
In terms of income, important inequalities can be observed among the French "départements".
According to the 2008 statistics of the INSEE, the Yvelines is the highest income département of the country with an average household income of €3,750 per month. Hauts-de-Seine comes second, Essonne third, Paris fourth, Seine-et Marne fifth.
Ile-de-France is the richest region in the country with an average household income of €3,228 per month compared to €2 478 on a national level. Alsace comes second, Rhône-Alpes third, Picardie fourth, Haute-Normandie fifth.
The poorest parts of France are French overseas territories, Guyanne being the poorest "département" with an average household income of €1,826. In metropolitan France, it is Creuse, in the Limousin region, which comes bottom of the list with an average household income of €1,849 per month.
Urban income inequalities
Huge inequalities can also be found among cities. In the Paris metropolitan area, significant differences exist between the higher standard of living of some western suburbs and lower standard of living areas in the north banlieues of Paris.
For cities of over 50,000 inhabitants, Neuilly-sur-Seine, a western suburb of Paris, immediatly continuing the city, is the wealthiest city in France with an average household income of €5,434, and 20% earning more than €8,000 per month. But within Paris, four arrondissements are surpassing wealthy Neuilly-sur-Seine in household income: the 6th, the 7th, the 8th and the 16th ; the 8th "arrondissement" being the richest district in France (the others three following it closely as 2nd, 3rd and 4th richest ones).
There were more than 280,000 US dollar millionaires living in France in 2010, or about 0.45% of the total French population , the wealthiest European is French multibillionaire and LVMH CEO and owner Bernard Arnault and the world's richest woman is French L'Oreal cosmetic empire heiress Liliane Bettencourt.