Atradius Country Report: France -- November 2010

Atradius’ country overviews provide short, concise information on large Western economies´ economic performance and insolvency development and on main emerging markets´ current political and economical situation and outlook.


General situation and outlook

Real GDP growth improved again in Q2 of 2010, by 0.7% year-on-year (Q1of 2010: 0.2%) and by 2.6% on the previous quarter (see chart below). This increase in growth can be attributed primarily to higher production and household consumption. Total domestic demand (excluding inventory changes) increased 0.4%, after its 0.2% fall in the first quarter.


Private consumption rose by 0.3% on the previous quarter in Q2 of 2010, contributing positively to GDP growth. Household consumption of manufactured goods increased by 1.5% in volume in September after a 1.6% decrease in July. However, the recovery of French industry has recently shown some signs of weakness. In contrast to export-driven economies like Germany, French businesses profit less from the strong demand of some emerging economies. Real private fixed investment remains subdued.


The government has announced measures to reduce the budget deficit in the coming year, but it is expected that France will not be able to meet the Maastricht deficit threshold of a maximum of 3% of GDP in the coming years.


After yearly increases between 2007 and 2009 (+4.9% - to 53,743 cases in 2009), we estimate that corporate insolvencies will decrease by 10% year-on-year in 2010 and 5% next year.


The International Monetary Fund (IMF) expects the French economy to grow by a modest 1.6% year-on-year in 2010 and 2011, with private consumption hampered by high unemployment and the expiry of the government’s stimulus measures.


General Information

Capital - Paris
Currency - Euro (EUR)
Population - 64.7 million
Main import sources (2009)

  • Germany - 18.3%  
  • Belgium - 8.4%
  • Italy - 8.1%
  • China - 7.7% 
  • Spain - 7.6%

Main export markets (2009)

  • Germany - 16.0%
  • Italy - 8.2% 
  • Spain - 7.8%
  • Belgium - 7.4%
  • UK - 7.1%

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