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France has shown a modest economic
recovery in the year 2006, although peak of the upturn is a
distant past. The real GDP picked up in 2004 to reach 2% but
slowed down again in 2005 to reach 1.2%. However, it is
estimated to reach 2.4% in the year 2006. The IMF forecasts
a GDP growth of 2.3% in 2007. A high unemployment rate
remains a cause of concern, although it has slightly fallen
in 2006 to reach 9%. In the mid-term, the ageing of the
population in France is a big challenge to the country’s
economy. In order to maintain the country's economic and
budgetary balance, the government had started to push
through necessary structural reforms (for example in the
labour market), which were subsequently withdrawn in the
face of opposition from students. As a result the government
will shy away pushing further economic reforms till the next
elections.
Main branches of industry
France is the largest agricultural power
in the European Union, producing one-fourth of the total
agricultural produce. Agriculture constitutes nearly 2.5% of
the French GDP, and France is the second largest
agricultural power in the world (after the USA). The
agricultural activities in the country are supported by huge
subsidies, especially the European subsidies. Wheat, corn,
meat and wine are the major agricultural products. The
manufacturing industry in France is well diversified, but
the country is going through a de-industrialisation process,
traduced by several relocations. The key industrial sectors
in the country are telecommunications, electronics,
automobile, aerospace and weapons. The services sector
accounts for approximately 75% of the French GDP. France is
the number one tourist destination in the world: more than
75.3 million foreign tourists visited France in 2005.
International trade
The French economy is very much open to
international trade. The country ranks second in Europe
(after Germany) for its foreign trade, and is ranks 8th in
the world in the list of favourite destinations for foreign
direct investments (FDI). The top three import partners of
France are: Germany, Italy and Belgium; while as the top
three export partners are: Germany, Spain and Italy. France
mainly imports petroleum, machinery & equipment, automobiles
and consumer goods. |