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Giovanni Hernandez
Ms. Rees
AP U.S. Government & Economics
7 March 2025
The French Economy
France is the oldest western European country, carrying with it a vast history of liberal and
colonial movements. Today, its culture is largely centered around its food, the fine arts, and
enjoying a proper work-life balance. Its economy is largely centered around the service sector
and a government that intervenes frequently in the economy. To begin, France has a land area of
247,270 square miles, which makes it slightly smaller than Texas. Of that land, 53% of it is
agricultural land, 29% is forest, and the other 18% has other uses such as manufacturing,
housing, etc. (CIA Factbook, 2023). France has a labor force, meaning people aged 15 or older
who are seeking employment or are employed, of 32 million people and an unemployment rate
of 7.3% (percent of the labor force that is unemployed). This unemployment is relatively high
among the world’s biggest economies, being roughly double that of the U.S. France also has a
high youth unemployment rate, meaning those aged 15 to 24 seeking employment but
unemployed, of 17%, which is the highest of any of the top ten largest economies (CIA
Factbook, 2023). As for its capital, France has a real GDP of 3.786 trillion dollars as of 2023.
This number differs from its nominal GDP by a conversion factor that changes with inflation. In
2023, France’s real GDP per capita (or person) was $55,400, and its rate of inflation was 4.9%
(CIA Factbook, 2023). However, inflation has since dropped down to 2.3% (Focus Economics,
2024). France can be seen as a prosperous economy that is still feeling some of the after-effects
of post-pandemic inflation but is otherwise very strong. France’s GDP can be broken down into
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70% services, which includes retail, tourism, financial services, and healthcare; 18% industry;
and 2% agriculture. By end use, the GDP is 53% household consumption, 23% government
consumption, and 23% investment in fixed capital, with there being roughly 2% more imports
than exports (CIA Factbook, 2023). Despite its massive economy, France’s GDP growth is small,
growing at a rate of 1.2% per year for the past decade (Focus Economics, 2024). France is also a
part of the Euronext stock exchange, which is the third largest exchange in the world with a total
market utilization of 5.8 trillion dollars but pales to the U.S. stock exchange, which has a market
utilization of 60 trillion dollars (Focus Economics, 2025). France has a Business Confidence
Index (BCI) of 99, which measures how confident businesses are in near-future investment
within the country, with 100 being even; this is roughly the same as the US’s BCI. On the
Economic Freedom Index, it scores a 64.4, making it the 63rd “freest” in the world (Heritage
Foundation, 2025). The index measures how free a business is to compete in the market, taking
government intervention, sufficient but not excessive regulation, and economic diversity into
account. According to the index, what takes away from France’s economic freedom the most is
the size and fiscal health of its government, with its public debt being 110% of its GDP and
three-year government spending being 58% of its GDP (Heritage Foundation, 2025). France is
home to numerous luxury brands such as LVMH, Hermes, and L’Oreal (Focus Economics,
2025), but its largest industries are service, food, or machinery-related. France has a Human
Development Index of 0.91, ranking it the 28th highest, and its GINI index is 31.5, making it
115th in the world (CIA Factbook, 2021). The Human Development Index (HDI) considers life
expectancy, education, and per capita income to measure how developed the average person is in
a country, while the GINI Index measures income inequality. These two measures showcase that
France is a highly developed country, but that the upper class still possesses much more income
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than that of the lower class or even middle class. Overall, France has considerable land, labor,
and financial capital at its disposal, as well as an ability to support businesses on par with the
United States, but its unemployment rate and size of government could be preventing further
economic growth.
France’s extensive infrastructure is what allows it to prosper. France has universal medical
coverage with both public and private hospitals, and it is 100% electrified. As of 2023, 87% of
its population use the internet, 77% of its population use social media, and there are 1.19 cell
phones for every person (CIA Factbook, 2023). As for transportation, France has 677,000 miles
of roadways (7th highest), 17,000 miles of railways (10th highest), 689 airports (10th highest),
447 dams, and more than 100,000 bridges, giving it a high infrastructure quality of 90 out of 100
(GI Hub). France also has an installed generating capacity of 149 GW and consumes 426 billion
kWh per year. Most of France’s energy comes from its 56 nuclear reactors, which produce 62.5%
of its energy (CIA Factbook, 2023). France’s investments in nuclear and renewable energies have
led to it having 4.63 tons of CO2 emissions per capita, which is high but lower than other
developed countries (World Bank). However, this, too, is on the decline due to increased usage
of renewable energy as part of the France 2030 Investment Plan, which aims to improve France's
sustainability and economic attractiveness through government spending.
France is a semi-presidential republic, meaning there is a president who is head of state and a
prime minister who takes care of daily governance (Oxford Law). As of right now, the President
of France is Emmanuel Macron. He has been president since 2017. Macron studied philosophy at
the University of Paris, worked in the finance industry, and then served as Minister of Economics
before being elected President at the age of 39. He is a member of the Renaissance party and is
considered a liberal and centrist (Encyclopedia Britannica). Since becoming president, he has
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created a more flexible labor market, reducing unemployment, and has led a transition towards
renewable energy. France is a parliamentary democracy and republic state that is bicameral. It
has executive, legislative, and judicial branches (Oxford Law). France is also a unitary state,
meaning the national government has complete control over regions, unlike the United States.
The President, along with Parliament, is elected by popular vote and then appoints a Prime
Minister who is responsible to Parliament and can be voted out by the National Assembly, one of
the two houses of Parliament, the other being the Senate. The elections are two-round runoff
elections, meaning candidates must first receive 12.5% of votes to move on to the next election,
where the winner is decided by relative majority. In France, changes in power are frequent and
peaceful. France has a stable, safe, and democratic government. The Worldwide Governance
Indicators, which measure voice and accountability, political stability and violence, government
effectiveness, regulatory quality, rule of law, and the control of corruption within a country,
indicate that the only area where France is not a world leader is in the absence of terrorism, since
it is a frequent target of foreign and domestic terrorist attacks. France also has significant social
welfare programs with social security assurances for workers, students, farmers, and artisans.
There is also a universal healthcare system, which was ranked 4th in affordability and access to
new treatments by the Foundation for Research on Equal Opportunity (FREOP). When it comes
to government ownership within the economy, the French government has ownership in the
French electrical company, several transportation and infrastructure-related companies, multiple
companies managing nuclear facilities, and a few media outlets (French Development Agency).
France has been a leader in women’s rights and is ranked 6th in gender equality in the EU
(EIGE). In France, there are three systems of education: primary, secondary, and higher.
Education is mandatory for those between three and sixteen, and its literacy rate is 99% (Campus
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France, CIA Factbook). Education is free for primary and secondary education, and higher
education is typically inexpensive at public universities. In short, France’s government services,
including social security, healthcare, and education, provide its citizens with the tools necessary
to live well and be productive in the economy, while not taking away from the liberties of its
citizens.
On the global scale, France enjoys tight relations with the European continent as well as most
of the world. It is a member of the European Union and uses its currency: the Euro. France trades
frequently with its European neighbors, especially Germany, as well as the U.S. France has been
affected by the Russia-Ukraine War through the price of oil and has been adamantly supporting
Ukraine throughout the conflict, since if Ukraine were to fail, Russian expansionism would pose
a threat to its borders. As for trade, France is a net importer of goods with 1.05 trillion in exports,
including aircraft, vehicles, and their respective accessories, and 1.09 trillion in imports, mainly
natural gas, cars, and petroleum. It has a current account balance of -30 billion (CIA Factbook,
2022), which ranks it at 203rd. This deficit occurs because of the difference in manufactured
goods being imported versus exported, but this too is being balanced through the growth in
service exports such as financial services. Lastly, as a member of the European Union and United
Nations, it has imposed sanctions against Russia, Belarus, Venezuela, Libya, and several other
countries (French State Department, 2025). These sanctions have resulted in problems
surrounding the import of oil, but the country has since adapted, and the price of oil has
normalized (INSEE).
In the end, France is one of the oldest countries in the world, but France as a republic was
founded in 1792. During the 1800s, the French Empire had an extensive network of colonies but
has since lost or freed them. During World War 1, France fought against Germany. During World
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War II, France was bombarded and occupied by Nazi forces, but it has since recovered
economically and has seen a gradual increase in its immigrant population since. Shortly after the
war, France also fought and lost the Algerian war for independence, which caused the fourth
French Republic, which was dependent on colonialism, to fall and be replaced by the current
Fifth French Republic (Britannica). Throughout its history, France has maintained a strong
relationship with the United States, first with its aid in the American Revolutionary War, then
when Allied Forces landed in Normandy, and more recently in the War on Terror and in global
trade. Ultimately, France’s long history of colonial imperialism led to it being an old giant on the
world stage, and while its advances in trade, welfare, and political policy have perpetuated this
status, the frequency of terrorist activity, high unemployment, and a lack of economic growth
potentially due to an excessively large government do reveal avenues for further improvements.
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