france economy

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France Economy
Introduction
According to 2015 OECD global index, France economy is seventh largest globally, and the second in the Euro zone. The report showed that the economy over the recent years has been on turbulence due to the rising global financial crisis in the world, the recent terror attacks, political instability and competition from the emerging economies such as China, India, Brazil and the Tiger Asian countries (OECD, pg 10a). It is notable that the economy of France has been much affected mostly from the period between 2008 to 2016 compared to the period 2000 to 2007 (pg 14b).
GDP annual growth rate
According to 2014 OECD statistics, 10 years before the 2009 economic crisis (2000 to 2008) the GDP annual growth was 2.0 on average (OECD, pg 19b). With a favour of only external trade and private consumption rates which were stable, the country was able to manage an average GDP of 2.9 percent in 2009. Analysts have been seeing this recovery as slow since the economy has been dwindling since 2009, with an average of economic growth of 1.1 percent every year from 2009 to 2013. In 2014 the economy of France was in stagnation with an expanding meager of only 0.4 percent in 2014 (OECD pg 22a).
Private Consumption
It is good to note that, private consumption has been traditionally major driver of economic recovery and growth in France and it was able to restrain the economic crisis of 2009. Over the period of two decades, and for the first time, however, private consumption failed to protect the economy of France in 2012.

This was after the crisis, along with high levels of consumer confidence that had facilitated the deterioration of economic growth.
In 2009, investment was among the GDP component that was hardly hit by the economic crisis with fixed investment diving only 9 percent in 2009. In 2010, the GDP annual growth rebounded at 1.9 percent while investment was able to capture only 0.8 percent growth in 2013 (OECD, pg 8c). Moreover, France being the net importer, the sector creates a very little impact the economy.
Fiscal Policy
Like many other countries in Europe, France is experiencing a high rise of public debt. Since the 2009 economic crisis, the government has formulated fiscal policies as a tool to control budget deficit (Lewis et al. pg 15). This has been possible through imposing of high taxes on essential and cutting down by 30% percent the government spending (IMF, pg9).
Manufacturing and service industry
Over the recent times, services are the major booster of France economy, contributing over 70 percent of the total GDP (Boulhol, pg 22). Some of the major subdivisions of services are the financial, tourism, banking, tourism and the growth of communication technology and other sectors. The manufacturing sector is another driver of the economy though does not produce much, as it accounts only 10 percent of the total GDP in France. Notably, France is the leader of aero scope, automobiles and luxury industries in the European Union and the whole world in general (Andrew et al. pg 25 and 26). Though agriculture accounts only 2 percent of the total GDP it is considered as one of the most strategic industry to the government of France as it is the beneficiary of subsidies and protectionist policies.
France GDP annual growth from 2013 – 2015

Source: (OECD Report on France Economy, pg 14c)
GDP per capita income
The GDP per capita income was recorded at 35669 UD dollars in 2013 which is equivalence to 282% global average. In 2000 the average per capita income was 30677.17 and compairing to 2013 growth (World Bank report pg 5). In 2007 France recorded the highest per capita income in history at 26075.58 US Dollars according to the World Bank report of 2008 (pg 6).
France GDP per capita –income from 2006 – 2014
(OECD report on France Pg 12c)
The Ease of Doing a Business in France
For three consecutive years the ease of conducting a business in France has remained unchanged at 27 from 2014 to 2015. From 2008 to 2015 the ease of conducting a business in France was at an average of 30.50 and most of times going as high as 38.80 in 2013 and also as low as 26 in the year 2010 (OECD pg 18c).
Ease of doing a business in France from 2008 -2014

(OECD report on France Pg 13c)
Exports
Over the recent years the France export have been dropping with a drop 0.2% in 2016 . The France economic quarterly report indicated that in February the outbound ships went down in performing the works of arts by -67.4%, natural hydrocarbons -8.8%, perfumes and cosmetics -2.1% electrical equipment at -1.0%, equipment 1.0 %, chemicals -1.7% and leather 0.2%.
Surprisingly, the sales of bikes, train and ships went high with an average of +2.5% (Koske, Wanner, Bitetti and Barbiero pg 21). Other prices that went high were that of metal, furniture, automotive goods, cardboard, aero scope products and refined oil. This means that though there was a down on overall export, major products such as aero scope and automotive have been on the rise.
Imports
Unlike the export the import in France has been growing over the recent years. For example, in 2016 the import in France grew at 2.8 percent (OECD pg 22c). The quarterly report indicated that the purchases of metal products, furniture, toys and automotive products rose significantly. The growth of import was also experienced in agriculture and cosmetics.
Unemployment
The level of unemployment in France rose by 10 percent in 2015 according to third quarter report of 2016. This was 1 percent high from the 9.9 percent of the second quarter. For instance in Metropolitan areas of France, 9.7% which is equivalent to 2.8 million of the total population was unemployed and the trend has been extending since in February the number of active people unemployed was 9.6% (World Bank Report, pg 35). The quarterly report has been indicated most the unemployed are the men of ages between 25-30 and a few of ages 50 and above. However, compared to 2015, the number of unemployed has gone down by 0.4%. The average of unemployed rate in France has been 9.26% from 2000 until 2016 and sometimes has been reaching 10.70%.
However, 2016 OECD (pg34) report has indicated that the number of unemployed is expected to increase in the coming two years due to slow economic recovery policies and measures that have been put forward to bring down the costs of labour. It is good to note that the gains from employment will not be enough to meet the demand of the growing labour force, a factor that will make the rate of unemployment to remain high in France (Boulhol pg16).
Other factors that will be likely to make the unemployment to remain high are due to the recent introduction of price developments hence creating weak aggregate demand of the consumer. However, since 2014 inflation rate has fallen as a result of low domestic demand and regulated energy prices though major inflation has not yet fallen, it still remains above 0.6 percent (OECD report pg 51).
France Unemployment rate

(OECD report on France Pg 13c)
The Brexit and its effects to France Economy
Just like the rest of the world, Brexit will drastically affect the economy of France. However, the impact will be modest in such a way that there will be a short term experience of market turbulence and overall effect on the business climate. This will affect the overall growth of the France economy and slow down the investment as well as foreign direct investment. The negative impact created by the Britain exit from EU will spread overtime and it is cumulatively. France is expected to lose 0.4 percent of its total GDP by 2019 (OECD report pg9c). This will depend on whether the exit will also affect the free trade agreement. However, there is a hope that steady economic recovery will continue in France due to the flexible private consumption as well as moderate growth in investment.
The influence of European Union
France being the Second largest economy in Europe plays a vital role in stabilization of European Union. Moreover, France adheres to all EU trade policies like any other member of the union. Being an active member of EU, the economy of France will continue to benefit as a result of regional trade agreements and the member of WTO. The influence of European Union has made France be a moderately an open economy.
However, as a result of EU there are some other barriers such as trade barriers where many of France’s agricultural products are monitored and controlled at the European level. France has already advocated on this policy due to the fact that most of the farmers in French have been highly relying on government subsidies.
Recommendations
The France government should look for the ways to reduce complexities found in the labour code and regulations. The government should also do away with economic rents to facilitate effective and healthy completion. The labour markets should be highly reformed as part of France structural reform agenda in order to cut down taxes. The government should also maintain more public spending and expand the responsibilities of intercommunalities.
Conclusion
Despite the challenges, the economy of France has been able to manage the great recession compared to many countries within the European Union. For example, in 2009, the economic contraction hit at 3.1 percent, being slightly shallower than big economies like Germany and Britain in 2010. According to 2016 winter forecasts, the economy of France in terms of GDP growth is expected to gain a momentum despite the challenges the country is currently going through. The gradual economic recovery in 2016 is expected to be 1.8% in terms of GDP growth and this is set mainly to be accelerated by low inflation as well as expected private consumption.
On the other hand, in mid 2014, the country experienced a steep fall of oil prices by 50 percent, and this has improved greatly the financial positioning on the key areas such as households and businesses, therefore, enhancing activity growth in 2016. In 2015, the country also experienced a moderate acceleration of investment and this has been mainly facilitated through the recovery of aggregate demand at the advantage of favorable credit environment. This was mostly facilitated by the European Central Bank.
Moreover, the suggested policy measures to lower down the cost of labour in order to maximize profits has been seen as a way to reduce the level of competitiveness from the emerging economies such as China and India. Other factors that are expected to boost the economy are the Euro 10 billion cut on employer’s social contribution.

Work Cited
Andrews, D. et al.“Housing markets and structural policies in OECD countries”, OECD Economics Department Working Paper, No. 836, 2011, Print
Boulhol, H. “Making the French housing market work better”, OECD Economics Department Working Paper, No. 861, 2011 OECD Print.
IMF, “Staff Report for the 2103 Article IV Consultation,” No. 13/151, (12 July, 2013), print.
Koske, I., I. Wanner, R. Bitetti and O. Barbiero , “The 2013 update of the OECD product market regulation indicators”, OECD Economics Department Working Papers, forthcoming, 2015 print.
Lewis, C. et al. “Investment Gaps after the Crisis”, OECD Economics Department Working Papers, No. 1168, OECD Publishing, 2014 print.
OECD a,” France, Structural reforms: impact on growth and options for the future,” OECD, 2014 Print.
OECDc, “Economic Outlook 96 database, updates and Going for Growth” 2016, print.
OECDb, “Product Market Regulation Statistics (Panels A, B, C and D)” ; World Competitiveness Center, 2014 print.
World Bank, “Doing Business 2015, Going Beyond Efficiency” The World Bank. World Economic Report, 2014 print.