ECONOMIC

ANALYSIS

FRANCE

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 GROUP 1

Artajo, Gerald

Alicaway, Janne Camille

Bachicha, Jamaica

Castillo, Charlene

Centino, Alyssa Syril

Damasco, Melo Jean

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TABLE OF CONTENTS
Introduction ................................................. 4
1. Country Profile...................................... 8
2. Demand Analysis ................................ 17
3. Import and Export ............................... 20
4. Market Analysis .................................. 22
5. Risk Analysis ...................................... 36
6. Conclusion .......................................... 39
Appendix ................................................... 40

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INTRODUCTION
France is the biggest Western European country regarding size and economy.
France, which has existed in its present form since the fifteenth century, is Europe's
oldest and largest nation. It is a leader in intellectual trends, the fine arts, fashion,
and cuisine. France is also the world's fourth-richest country and Europe's leading
agricultural producer.

Every field requires a systematic approach for a better understanding of the

subject and general processing. Economists regard economic analysis as one such
methodical strategy that assists them in making the best use of limited resources. It
entails evaluating or investigating subjects or concerns from the standpoint of an
economist. The economic analysis essentially entails the evaluation of costs and
benefits. It starts by ranking projects based on economic viability to aid better
allocation of resources. The study of economic systems is known as economic
analysis. It could also be an investigation into a manufacturing process or an
industry. It may also be a study of a production process or an industry. The analysis
aims to determine how effectively the economy or something within it is operating.
In addition, it aims at analyzing the welfare impact of a project.

Economic analysis is very important as it allows organizations and their

donors to compare the impact of social intervention to the cost of implementing it.
These comparisons aid in determining the most effective resource
allocation. Economic analysis helps charities and their funders compare the value of
the impact created by a social intervention with the cost of creating it. These

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comparisons help decide how best to allocate resources. Economic analysis is a form
of evaluation that goes beyond the question ‘does it work?’ that other impact
evaluations address, and helps answer the question ‘is it worth it?’ The goal of the
analysis is to identify how well the economy or a component of it is performing.
Economic analysis has been more prominent in the impact measurement practices
of charities and donors in recent years, as the sector has been under increasing
pressure to give estimates of what value is created for every pound invested. But,
economic analysis isn't necessarily the most persuasive piece of evidence for
demonstrating a charity's impact. Because it relies on solid outcomes data and a
strong evidence basis, charities may not have the essential pieces in place to perform
good economic analysis and may find it hard. Economic analysis must be reliable;
otherwise, it will be simple to identify flaws in calculations. If the economic analysis
is done incorrectly, it might lead to erroneous charity resource allocation decisions.

France is a modern European state and a republic and is one of the world's top
six economies. One of the oldest nations in Europe, France - which the Romans
called Gaul - is also a country with a very rich cultural and environmental
and cultural heritage. In ancient times France was part of the Celtic territory known
as Gaul or Gallia. Its present name is derived from the Latin Francia, meaning
"country of the Franks," a Germanic people who conquered the area during the 5th
century, at the time of the fall of the Western Roman Empire. The capital and the
nation's largest city is Paris. Apart from Paris by far the largest urban area in France,
other major cities are Lyon, Marseille, Lille, and Toulouse. Metropolitan France
(France in Europe) is divided, administratively, into 13 regions, and 96 counties,
known as departments. There is no official religion in France; France is a secular
republic. However about half of the French people say they are Catholics and 2%
Protestants. Less than 10% of French Catholics are regular church-goers. Some 3%

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to 4% of the French population are Muslims. There are churches in all French towns
and most villages. The cost of living in France is fairly similar to neighboring
countries, though some things (like supermarket food) may be more expensive.
Staying in Paris can be expensive - as can staying on the Riviera, particularly during
the peak tourist periods. On the other hand, fruit, wine, travel, hotels, and restaurants
tend to be cheaper than they are in the United Kingdom, particularly in rural areas,
and there are plenty of ways of avoiding tourist traps. The government system is a
republic; the chief of state is the president, and the head of government is the prime
minister. France has a mixed economic system that includes a variety of private
freedom, combined with centralized economic planning and government regulation.
France is a member of the European Union (EU).

The French economy rebounded quickly following the coronavirus crisis, in

particular thanks to the acceleration of the vaccination campaign and strong public
support measures. Rapid and effective implementation of the recovery and
investment plans would help support stronger and more sustainable growth.
However, public spending has reached an exceptionally high level, with a mixed
performance, which calls for reorganizing the fiscal framework to ensure the
sustainability of public finances. Education and labor market integration policies
will need to be better targeted, with specific training efforts for young people and
older workers. Reinforced support for the most vulnerable and less qualified should
reduce inequalities, including territorial ones. The transition to a greener economy
is the other key challenge that France must take on. Strengthening green investments
is crucial to accelerate the pace of emission cuts, as well as putting in place the
necessary incentives to foster behavioral changes, if necessary with targeted support
for the most vulnerable.

Economic Forecast Summary (May 2021)

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 Economic activity is projected to rebound by 5.8% in 2021 and 4.0% in 2022.
After a weak first half of 2021, activity will strengthen as the vaccine rollout
accelerates and sanitary restrictions are lifted. In addition, the drawing down of the
high level of saving due to the sanitary restrictions will boost consumption as pent-
up demand is satisfied. Faster global growth will raise export prospects. Improving
global demand, accommodative financing conditions, and government capital
spending in line with the recovery plan will support investment. Still, employment
will recover slowly, as the participation in the job retention schemes will decline.

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 I. COUNTRY PROFILE

GEOGRAPHICAL LOCATION

France, the largest country in Western Europe, has long been a gateway
between the continent's northern and southern regions. Its lengthy borders
touch Germany and Belgium in the north; the Atlantic Ocean in the west; the
Pyrenees Mountains and Spain in the south. France is located on the western edge
of Europe, bordered by the Bay of Biscay (North Atlantic Ocean) in the west, by the
English Channel in the northwest, and by the North Sea in the north. The largest city
and capital is Paris.

Wide fertile plains dominate most of the north and west, making France the
agricultural epicenter of Europe. The sprawling, forested plateau of the Massif
Central, a range of ancient mountains and extinct volcanoes, occupies France's
southern interior.

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LANGUAGE

Spoken language is French, the official language and first language of 88% of
the population, according to the BBC. It is the dominant language of the country's 70
million residents, but there are a number of variants based on region. French is the
second most widely learned foreign language in the world, with almost 120 million
students, according to the French Ministry of Foreign Affairs and International
Development. Most of those who speak minority languages also speak French, as
the minority languages are given no legal recognition. 3% of the population speak
German dialects, predominantly in the eastern provinces of Alsace-Lorraine and
Moselle.

Linguists estimate that there are around 75 regional languages in France.

Some of these are taught in schools, including Occitan, Breton, Basque, Corsican,
Alsatian and certain Melanesian languages such as Tahitian. Every year, 400,000

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pupils learn a regional language in France’s state-run and private schools. Those
living near the border of Italy may speak Italian as a second language, and Basque
is spoken by people living along the French-Spanish border. Other dialects and
languages include Catalan, Breton (the Celtic language), Occitan dialects, and
languages from the former French colonies, including Kabyle and Antillean Creole.

CULTURE

France is one of the oldest nations on Earth and the most ethnically diverse
country in Europe. These deep and broad influences have made France a world
leader throughout history in nearly all aspects of culture, including cuisine, wine-
making, politics, philosophy, music, art, film, fashion, literature, and sports. Equality
and unity are important to the French. The French also value style and sophistication,
and they take pride in the beauty and artistry of their country. The French take
immense great pride in their nation and government and are typically offended by
any negative comments about their country. Visitors, particularly Americans, often
interpret their attitude toward foreigners as rude. The French embody romance and
passion, and there is an open attitude toward sex outside of marriage, according to a
study by France's National Research Agency on AIDS. Even the country's top
politicians have been known to carry out extramarital affairs without making an
effort to conceal them. As a reflection of the country's secular nature, it is not
uncommon for children are born to unmarried couples. In addition to traditional
marriage, French couples also have the choice of getting a pacte civil de
solidarité (PACS). This is a union that has many of the same benefits of marriage,
like tax breaks, but can be dissolved with a notice or by marrying someone else or
instead of a divorce. Two-thirds as many French couples are in a PACS as are
married, according to The Economist.

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 French cuisine, food and wine are central to life at all socioeconomic levels,
and much socializing is done around lengthy dinners. While cooking styles
have changed to emphasize lighter fare, many still associate French cooking
with heavy sauces and complicated preparation. Some classic French dishes
include boeuf bourguignon — a stew made of beef braised in red wine, beef
broth and seasoned with garlic, onions and mushrooms — and coq au vin, a
dish made with chicken, Burgundy wine, lardons (small strips or cubes of
pork fat), button mushrooms, onions and optional garlic. French fries,
interestingly enough, may not be French. According to National Geographic,
they may actually be from Spain or Belgium. The reason why Americans call
fried potatoes French fries is because Thomas Jefferson discovered the treat
while in France while serving there as American Minister from 1784 to 1789.
He brought the idea back to the States.

 Clothing, Paris is known as the home to many high-end fashion houses, such
as Dior, Hermes, Louis Vuitton and Chanel. Many French people dress in a
sophisticated, professional and fashionable style, but it is not overly fussy.
Typical outfits include nice dresses, suits, long coats, scarves and berets. The
term haute couture is associated with French fashion and loosely means
fancier garments that are handmade or made to order. In France, the term is
protected by law and is defined by the Paris Chamber of Commerce,
according to Eva Domjian, a London-based fashion writer and editor.

 French art, Art is everywhere in France — particularly in Paris and other

major cities — and Gothic, Romanesque Rococo and Neoclassic influences
can be seen in many churches and other public buildings. Many of history's
most renowned artists, including Claude Monet, Edgar Degas, and Camille
Pissarro, sought inspiration in Paris, and they gave rise to the Impressionism

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 movement. The Louvre Museum in Paris is among the world's largest
museums and is home to many famous works of art, including the Mona Lisa
and Venus de Milo.

Most people associate French culture with Paris, which is a center of fashion,
cuisine, art and architecture, but life outside of the City of Lights is very different
and varies by region. Historically, French culture was influenced by Celtic and
Gallo-Roman cultures as well as the Franks, a Germanic tribe. France was initially
defined as the western area of Germany known as Rhineland but it later came to
refer to a territory that was known as Gaul during the Iron Age and Roman era.

POPULATION

France has a total population of 67.4 million people (in 2021), 65.2 million
inhabitants in Metropolitan France (the European part of France plus Corsica), and
about 2.2 million in its overseas regions (French Guiana, Guadeloupe, Martinique,
Mayotte, and Reunion). Other major dependencies are French Polynesia and New
Caledonia. The current population of France is 65,472,067 as of Wednesday,
November 17, 2021, based on World meter elaboration of the latest United Nations
data.

According to current projections, France’s population is expected to reach its

peak at 67.68 million people in 2045, after which it will decline slowly back down
to 65.55 million people by the end of the century. In the past ten years, France’s
population growth rate has decreased significantly to 0.22%. This growth will
become even smaller in the coming years until 2045 when population growth
becomes negative. France was once the most fertile country in the European Union;
however, its rates are beginning to change. France’s birth rate is 11.2 births per 1,000

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people and its death rate is 9.1 deaths per 1,000 people. The fertility rate is 1.850
births per woman, which has been declining in recent years.

France as a whole was growing at a faster rate than most other countries across
the globe. In fact, its natural growth, which excludes any immigration figures,
accounted for nearly the whole of the natural growth recorded in the European Union
in 2003. The birth rate exceeded the death rate by a considerable amount -- 302,432
in 2006 which was the highest recorded figure since 1973. Further contrasts in the
rates led to the final figures declared in the 2011 census. The country also has the
second highest number of children per family in Europe; 2.01 when the last figures
were announced.

France Population Projections, Metropolitan France is expected to see its

population grow by another 9 million people over the next 40 years, placing the
country's population around 72 million by 2050. To reach this projection, fertility
rates will need to stay about the same, mortality will need to decrease, and net
migration will need to remain about 100,000 annually.

With its population growing despite decreases in many of its neighboring

countries, France is finally back in the race to be the most populous country in
Europe. By 2050, it's expected that Germany will have just 70-74 million (compared
to 2012's 82 million), while Britain's population will be about 73 million, compared
to today's 63 million.

CURRENCY

The national currency of France is the Euro (EUR). The currency symbol of the
euro is € and EUR is the 3 letter code. This makes it the main currency they use and
the best currency for you to use if you are travelling to France. While the Euro is the
official currency in France, it can also be used in 18 other countries within the

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European Union. Euros issued by the European Central Bank and replaced the french
franc in 2002.

In France, it’s more common to see the

symbol written after the numeral, as in 10€. The second most traded currency on the
world’s foreign exchange markets, the euro is issued by the European Central Bank.
While France mints its own coins with a national design on one side, these coins can
be used everywhere in the eurozone. And vice versa: any coins minted with national
designs from other eurozone countries can be used in France. French euro coins
come in the standard eight denominations: one cent, two cents, five cents, ten cents,
20 cents, 50 cents, €1, and €2. The ‘common’ side of the coin used across the
eurozone features the numerical value of the coin and a map of the European Union.
On the reverse ‘national’ side, all coins bear the same design.

Euro banknotes come in denominations of €5, €10, €20, €50, €100, €200, and
€500. The designs are the same throughout the eurozone with different sizes and
colours denoting the different bill values. You’re unlikely to come across a €500
note but it’s a good idea to avoid even the €100 and €200 bills as some merchants
are reluctant to accept these higher denominations.

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BASIC ECONOMIC PROFILE OF THE COUNTRY

 Opportunity: France's diversified economy is led by tourism, manufacturing,

and pharmaceuticals. The government has partially or fully privatized many
large companies but maintains a strong presence in such sectors as power,
public transport, and defense.

 Mission: Promoting France’s economic interests is one of the main

responsibilities of Business France and the Ministry for Europe and Foreign
Affairs, both within France and in the network. Helping French businesses
export to external markets; attracting job-creating foreign investment to
France; Adapting the European and international regulatory framework to
our defensive and offensive economic interests; Promoting France's vibrant
businesses and start-ups. The Ministers are fully committed to this goal and
deal with economic issues on each of their trips.

 Solution: Officials and business leaders in France are looking ahead to a

period of recovery and reflecting on the wider outlook for France’s political
and economic future. France is still in the throes of the COVID-19 pandemic
as the delta variant spreads rapidly, however. France might still be in the
throes of the COVID-19 pandemic as the delta variant spreads rapidly, but
officials and business leaders are looking ahead to a period of recovery and
reflecting on the wider outlook for France’s political and economic future.
Like other countries, France introduced emergency measures to support the
economy, businesses and employment during the pandemic and there are
now some concerns that the tapering of that support could cause job losses
and some firms to shut down.

 Market focus: France is a business-friendly country, with one of the largest

markets in Europe, and access to the European single market. Its capital,
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 Paris, is an important financial center in the region and the European leader
in venture capital. France also has a talented workforce, innovative business
leaders, a high-quality transportation infrastructure, and strong intellectual
property protections. In recent years, the French government has expanded
their policies to continue attracting foreign interest and investment. France
is an industrial powerhouse and despite a decline in overall output,
manufacturing remains one of the country’s largest economic sectors. The
country is home to leading automobile manufacturers (Peugeot and Renault)
and the world’s leading aircraft manufacturer (Airbus). With an increased
focus on technology and innovation and the country’s strong entrepreneurial
culture, the French government continues to support the manufacturing
sector in order to increase its competitiveness.

 Competitive advantage: As with many European countries, tourism plays a

key role in the country’s economy. France receives over 85 million visitors
per year – representing nearly 10% of the country’s GDP. France is one of
the most visited countries in the world, and its popularity can be attributed
to its history, cultural influence, culinary experiences, and renowned
attractions, including UNESCO world heritage sites located throughout the
country.

 Ownership: In addition to exclusive ownership, the French system

recognizes the division of ownership between a right of usufruct (a right to
receive the income and produce from real estate without outright ownership)
and a bare ownership (ownership without the right to use and derive profit
from the property) as well as timeshare arrangements.

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  Expected returns: According to Oxford Economics, the French economy is
forecast to grow 5.4% in 2021, after a steep 8.2% contraction in 2020. The
economic rebound will be mainly driven by domestic demand.

II. DEMAND ANALYSIS

In 2020, France ranked as the world’s seventh largest economic power, just
behind the United Kingdom and India. The country’s recovery from the 2008
economic crisis has come later than in other European countries and remained fragile
due to structural imbalances. In 2020, due to the COVID-19 pandemic, France
suffered one of the sharpest economic contractions among EU countries. According
to IMF estimates, GDP growth contracted by nearly -19% (y-on-y) in the second
quarter of 2020. During the whole year 2020, output declined by -8.2% as economic
activity rebound during the third quarter. According to the IMF's April 2021 forecast,
GDP growth is estimated at 5.8% in 2021 before slowing down to 4.2% in 2022,
subject to the post-pandemic global economic recovery. Private consumption and
investment activity should benefit from the fiscal stimulus measures, while firming

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global demand should boost exports. However, a prolongation of the health crisis
into 2021 could delay economic recovery.

In 2020, France was among the most affected countries from the COVID-19
pandemic. The authorities responded by implementing two stringent lock-down
measures in March and in October, and the budget was amended several times to
adapt to the crisis. A large emergency support package, which focuses on supporting
households and firms by preserving jobs and providing liquidity, was adopted. As a
result of these support measures and falling revenues, budget deficit increased to -
3.6% GDP in 2020, from -2% GDP in 2019, and is forecast to remain at a high level
in 2021 (-5.2% GDP) and 2022 (-4% GDP) (IMF). Public debt, which was already
one of the highest in the eurozone, soared from 98.1% GDP in 2019 to 113.5% GDP
in 2020, and is forecast to reach 115.2% GDP in 2021 and 114.3% GDP in 2022.
Inflation decreased from 1.3% in 2019 to 0.5% in 2020, and is expected to remain
low in 2021 (1.1%) and 2022 (1.2%). The current account deteriorated significantly
as exports fell faster than imports. The priorities for 2021 will include deploying the
vaccination plan as well as implementing the recovery plan to support French
businesses, minimise the rise in unemployment, and facilitate the green and digital
transitions as outlined in the Plan de Relance. In addition to the risk posed by a
prolongation of the health crisis into 2021, France faces structural challenges: high
structural unemployment, weak competitiveness, and high public and private debt
burdens. High unemployment rates, especially among youth, remain a growing
concern for policymakers.

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 Unemployment rate, which was declining before the pandemic, reached an
estimated 8.2% in 2020 and is expected to increase to 9.1% in 2021 and 9.2% in
2022 (IMF). Social mobility remains low and the employment rates of many
disadvantaged groups are poor. The labour reform passed in 2017 aimed at injecting

more flexibility in the labour market.

France is the largest agricultural power in the European Union, accounting for
one-fourth of the EU’s total agricultural production. Nevertheless, the agricultural
sector only represents a very small part of the country's GDP (1.6%) and employs
2% of the population. French agricultural activities receive significant subsidies,
especially from the European Union. Wheat, corn, meats and wine are France's main
agricultural products.

France's manufacturing industry is highly diversified; however, the country is

currently undergoing a de-industrialisation process, which has resulted in the
outsourcing of many activities. Industry represents 17.1% of GDP and employs a
fifth of the active workforce. The key industrial sectors in France are
telecommunications, electronics, automobile, aerospace and weapons.

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 The tertiary sector represents 70.2% of the French GDP and employs 78% of the
active workforce. France is the leading tourist destination in the world with 91
million foreign visitors in 2019, another consecutive record year after 2018. The
discovery of the cultural and gastronomic heritage of France and shopping are the
main activities popular with foreign tourists.

In 2020, due to the COVID-19 pandemic, the lockdown measures caused an

unprecedented loss of activity in virtually all sectors. The most sharply impacted
include tourism, automobiles, transport and aerospace, while the agri-food and
pharmaceuticals sectors have been resilient.

III. IMPORT AND EXPORT

France is a prominent player in international trade. It is the world’s sixth largest

merchandise exporter and importer (WTO, 2019), with trade accounting for more
than 65 percent of the country’s GDP (World Bank, 2019). Aircraft, cars,
pharmaceuticals, food (wine), hydrocarbons, and electronic components are the
main exports of France. Many consumer goods, vehicles, hydrocarbons, and
pharmaceuticals are imported into the country. Trade volumes dropped in 2020 as a

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result of the COVID-19 epidemic. According to IMF data, the number of goods and
services exported fell by -16.8% in 2019 compared to the previous year, while the
volume of imports fell by -11.4 percent.Exports are expected to rebound at a
somewhat higher rate in 2021 (+9%) and 2022 (+5.4%), according to the IMF, than
imports, which are expected to rise by 8.5 percent in 2021 and 4.7 percent in 2022.

Planes, Helicopters, and/or Spacecraft ($46.3 billion), Packaged Medicaments

($26.3 billion), Cars ($24.5 billion), Gas Turbines ($19.1 billion), and Vehicle Parts
($14.9 billion) are France’s top exports, with the majority going to Germany ($76.2
billion), the United States ($47.4 billion), Italy ($41.2 billion), Spain ($40.8 billion),
and Belgium ($39 billion).Planes, Helicopters, and/or Spacecraft ($46.3 billion),
Wine ($11.1 billion), Beauty Products ($10.1 billion), Perfumes ($5.77 billion), and
Bovine ($1.57 billion) were France’s top exports in 2019.

Cars ($39.5 billion), Crude Petroleum ($21.6 billion), Refined Petroleum ($19.9
billion), Packaged Medicaments ($16.2 billion), and Aircraft Parts ($15.7 billion)
are France’s top imports, with Germany ($115 billion), Belgium ($55.6 billion), Italy
($54.9 billion), Spain ($47.4 billion), and China ($45.2 billion) accounting for the
majority.Butter ($989 million), Glands and Other Organs ($986 million), Nuclear
Reactors ($423 million), Other Metal Fasteners ($371 million), and Agglomerated
Cork ($179 million) were the world’s top imports in 2019.

The European Union (Germany being the first customer and provider), the United
States, and China are France’s primary trading partners. The United Kingdom’s exit
from the European Union (Brexit) poses numerous problems and may result in a
reorganization of commercial relations. The United Kingdom is France’s fifth
customer and eighth supplier.

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IV. MARKET ANALYSIS

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  Industry Type:

France is an advanced and industrialized country and has the third largest economy
in Europe. With a GDP of $2.8 trillion, France has the sixth largest economy in the
world, based on nominal figures. The economy currently demonstrates growth, after
emerging from the financial recession of 2008.

Energy

One of the major industries in France is the energy sector. France’s leading
electricity company, Electricity de France (EDF), is the largest utility company in
the world. The energy company, which is listed on the French Stock Exchange, has
the state as the majority shareholder. In 2003, 22% of the total electricity in the
European Union was produced by EDF. Another key player in the energy industry
is Engie, a utility company based in Courbevoie, France. Engie is the world’s largest
independent utility company and is involved in a wide array of activities, including
natural gas production and distribution, nuclear power, and electricity distribution.
Engie became the largest solar energy company in France after acquiring
Solairedirect in July 2015Another French company, Total S.A., is among the largest

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oil and gas companies in the world. The company, whose headquarters are based in
Paris, is also engaged in chemical manufacturing, as well as operating service
stations across the world.

Manufacturing and Technology

Manufacturing is among the largest industries in France, accounting for billions of

dollars in the country’s GDP. The country is recognized as the fourth largest
automobile manufacturer in the world and is home to two of the largest automobile
manufacturers in the world: Peugeot and Renault. France is also renowned for its
aerospace sector, which is dominated by Airbus, which is the world’s leading aircraft
manufacturer.

Technology is another important economic pillar in the country's economy. France

is ranked among the most technologically advanced countries in the world, and the
country has an ideal environment for technological research and innovation. This
environment has led to the growth of some of the largest technology companies in
the world. For example, Publicis, a France-based company, is the third largest
advertising company in the world. Sophia Antipolis, a large technology park, is the
major technological hub in France. Situated in Valbonne, the technology park houses
offices of many major technology companies, including Amadeus, Avanade,
3Roam, Air France, Cisco, Accenture, Broadcom, Intel, Huawei, IBM, Lionbridge,
and Orange. Sophia Antipolis is also home to numerous international institutions
including ETSI (European Telecommunications Standards Institute), Skema
Business School and the ERCIM (European Research Consortium for Informatics
and Mathematics). The technological park was established in 1984 and was named
after its founder, Sophia Tomarken.

Transport

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Transport in France is a multi-billion industry, and some of its key players are major
global companies. France has one of the densest networks of road and railways in
the world, which interconnects the nation’s cities. The railway network in France
stretches 18,580 miles, most of which is under the operation of SNCF (French
National Railway Corporation). However, the largest company in France’s railway
transport is Alstom, which is based in Saint-Ouen, but has operations all over the
globe and has over $37 billion in assets. The French cities of Paris, Marseille, and
Lyon have extensive metro systems, while Rennes, Lille, and Toulouse have light
metro systems. France has one of the highest concentrations of airports, with a total
of 478 airports across the country. The busiest airport in the country is Charles de
Gaulle Airport in Paris, which records about 60 million passengers each year,
making it the fifth busiest in the world. Air France is the French national carrier, and
flies to 150 destinations on all six continents of the world.

Agriculture

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Agriculture was traditionally the primary economic activity in France prior to the
Industrial Revolution in the 19th century. France is recognized as having the sixth
largest agricultural production in the world, and the largest in the European Union.
France is also the second largest exporter of agricultural products in the world, and
is only surpassed by the United States. Huge wheat farms are located in the northern
region of the country, while the southern part of France is renowned for its vineyards
and horticultural products. France is the largest producer of sugar beets and the
second largest producer of cheese and wine in the world. Western France is the main
producing region of dairy products, poultry, apples, and pork. The vast majority of
agricultural exports are destined to member states of the European Union, which
receive 49% of all agricultural exports from France. The agricultural industry in
France has the privilege of receiving significant support from the EU in the form of
subsidies, which amount to more than $11 billion. In recent years, the industry has
implemented numerous reforms as a result of international agreements including the
General Agreement on Tariffs and Trade.

Tourism

France is the most popular destination in the world, receiving about 85.7 million
tourists each year. This massive tourist traffic also means that France is ranked fifth
in the world in terms of tourist spending. The tourism industry is a key economic
pillar in France, injecting over $70 billion to the country’s GDP. Of this total, 70
percent comes from domestic tourists, while the remaining 30 percent comes from
international tourists. Germany is the main tourist source country for international
tourists, as visitors from Germany stayed for 86.4 million nights in 2014. The
industry represents 9.7% of the country’s GDP. France’s popularity to tourists is
attributed to a wide array of prime tourist attractions located across the country.
These attractions range from the nation’s capital, Paris, to small picturesque village

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towns. The Eiffel Tower in Paris is the world’s most visited paid monument, and is
among the 37 UNESCO World Heritage Sites throughout France.

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  Market Segmentation: France is a unique country full of different
elements that businesses must understand if they wish to market their
service successfully.

France Demographics – People

With about 66 million people, France has 0.96 males to every female, and a life
expectancy of around 82 years.

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France Demographics – Ethnicity and Religion

The majority of citizens identified as Roman Catholic of 2014 most French citizens
are of Celtic, Latin, Slavic, and North African or Indochinese descent.

France Demographics – Education and Employment

The official language is French, meaning almost everyone speaks varying degrees
of the language. France has a 99% literacy rate, with an average of the years spent
in school 10% of French citizens are unemployed.

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France Demographics – Income

The average salary in France set out by the government is $2660 USD per month;
this is around $32,000 per year.

France Geographic – Population

There are approximately 103 people per square kilometer in France 79% of the
population lives in urban areas. The remaining 21% live in rural areas. Paris is the
capital city with a population of around 22 million.

30
France Geographic – Europe

France is located in Europe and is part of the European Union meaning it is a part of
both of these markets. Due to proximity to other countries, many youths and retired
people travel.

France Psychographics -Life style

The French have a love for good food and tend to eat out or have large gatherings
for meals. They prefer healthy food, so fast food restaurants really only appeal to
tourists.

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France Psychographics – Social Classes

Like any other country, France has an upper, a lower and a middle class. The French
bourgeoisie represent the fashionable middle and upper classes who have inherited
old money or recently become rich.

 Competition: Shares in the carrier were down 4.1 per cent by mid-
afternoon in Paris, pushed lower by an analyst downgrade by Bernstein.
Anne Rigail, chief executive, said that while the airline would hire in some
areas over the coming year, “we also have the responsibility to guarantee
an even balance of our activities in certain sectors to secure their long-term
viability”. Air France said it faced “extremely fierce competition” from the
TGV train service domestically and from no-frills airlines serving the rest
of Europe. It said it had lost 90 per cent of its market share on routes where
high-speed trains connect Paris to the provinces in under two hours. It
criticised low-cost carriers for not contributing “to developing
employment in the regions where they operate, taking advantage of
European mobility and basing employees in jurisdictions with lower labour
costs”. Air France’s domestic business reported a loss of €189m in 2018,
taking cumulative losses since 2013 to €717m. It operates domestic flights

32
 through Air France and its subsidiary Hop. The company faces a struggle
to find 500 employees who are willing to leave, according to one analyst
who did not wish to be named. “If they could get away with it, the stock
would be up, not down,” the analyst said. “That tells you what the market
thinks about it.” Frédéric Gagey, Air France-KLM’s chief financial officer,
flagged the voluntary redundancies to analysts at the start of May. The
French airline, which has suffered from a poor relationship with its unions
in recent years, will have to navigate the job losses carefully. Strikes over
pay cost it €335m in the first half of 2018, and Jean-Marc Janaillac quit as
Air France-KLM chief executive a year ago after losing a staff vote over a
pay deal that had been rejected by unions. Air France signed an agreement
with its pilots’ union in February, bringing an end to the costly period of
industrial action. Ben Smith, Mr Janaillac’s replacement as chief
executive, said at the time that the group was “now in a position to begin
implementing more ambitious plans and winning back its European
leadership position”. Unions on Monday reacted cautiously to the plans.
Jean Hédou, who represents transport workers at Force Ouvrière, said his
union was still assessing the move. “It is too early to judge,” he added.
“We are always against people losing their jobs but there is a difference
between voluntary measures and firings.”
 SWOT Analysis: France is filled with citizens who are proud of the
history and accomplishments of their country. Within this country resides
beautiful monuments, attractions, and people — which make it a hot spot
for tourists all over the world. In this SWOT analysis of France, you’ll
learn about the many strengths, weaknesses, opportunities, and threats
affecting the country within the last few years. Some of these sections
discuss what industries give France such a formidable economy, the
33
 surprising problems felt by citizens and expats, and the biggest fear lying
deep in the hearts of the people.

Strengths: A celebrated destination spot for travelers and expats

The telecommunications, tourism, agriculture, and weapons industries all contribute

to France’s economy. As an agricultural producer, France is one of the top countries
in Europe. Soybeans, seafood, and nuts are only a few of the many products
contributing to the $600 million made in agricultural exports each year. France’s
other popular exports include wine, cheese, and other processed products. The
French rely on the country’s development of weapons, guns, and warships. In fact,
the country is in the top five for the largest weapon exportation worldwide. It goes
without saying that France is a popular tourist destination, what with its attractions
and historical buildings, like the Eiffel Tower, the Louvre, and until recently, the
Notre Dame. People are particularly attracted to Paris, the “city of love”, but the
entire country has fantastic acts, cuisine, and destinations. The property market in
France is particularly stable, even in the more populated areas like Paris and the
French Riviera. Not only are these locations safe, but the price of property is low,
and interest rates are both negotiable and reduced — a dream for anyone wishing to
buy property in France.

The country welcomes business and innovation. Both give the economy a boost
because it supplies job opportunities for citizens and expats. France also encourages
funding for startups and managing business taxes is simple. Thanks to this, having
an entrepreneurial mindset when in France is a quiet strength, inviting challenge and
opportunity. And for anyone living or working in France, the healthcare services are
exquisite. It’s thorough, efficient, and accessible. The truth is, the French healthcare
system is known to be one of the most beneficial systems in the world.

34
Weaknesses: Rude staff or a difference of cultural belief?

Here’s the truth: if you don’t speak French, you’ll have a hard time visiting (much
less living) in this country. Most people stick to French (the country’s main
language) regardless of whether you’re buying land or asking for some water at a
cafe. On top of the potential language barrier, the living costs in France are high. If
you come over with American or British currency, the exchange rate will make it
easier on you financially. But if you don’t, you may find it difficult to survive for
long. A random complaint of the French is the customer service. As in, there isn’t
really much. Unlike in the West where workers are taught the “customer is always
right”, France doesn’t follow this belief. Employees are more direct — they speak
clearly, but don’t necessarily smile while providing service. In some cases, they can
come off as indifferent or rude. It’s more likely that the French aren’t rude, they just
don’t “above and beyond”. Once their job is accomplished, the workers move on to
the next task without dallying. The administration is a major weakness in the
country. As a civilian, expat, or traveler, it may be difficult to get a straight answer
out of the administration. If you’re not given the runaround, you’re buried under
paperwork. This wouldn’t be such a problem if the administration weren’t known to
lose papers often, requiring you to re-do the paperwork or risk having your request
denied.

Opportunities: Budding industries and help amid historical tragedy

France is the leader in pharmaceutical and aerospace. The country may explore more
opportunities within these industries, specifically in relation to foreign suppliers and
partners. Additionally, the other popular French industries, such as education, travel,
and digital space, can allow for growth in new sectors. The country is seeing
advancements in telecommunications, e-commerce, and IT too. The French
population is falling in love with American products. Everything from clothes to
35
consumer goods is wanted, and the government is providing. The importing of these
American products not only pleases consumers but also encourages foreign business,
trading, and partnerships. Here’s another unfortunate opportunity bred from tragedy.
Nearly all of the famous Notre Dame recently succumbed to a devastating fire this
year. Millions of people around the globe mourned the loss of this monumental
historical building. Although much was destroyed, the foundation remains, and the
objects within were saved from the flames. This tragedy has allowed people from
within and outside of France to bond. It also led international Influencers and the
wealthy to donate funds to rebuild this legendary landmark.

Threats: Devastating terrorist attacks

Unfortunately, France has fallen victim to several acts of terrorism from Islamist
terrorist groups. Since 2015, hundreds of people have died. These attacks include
the denotation of bombs, a terrorist driving a truck through a crowd of people, and a
knife attack in the Louvre. France is also threatened by high volume vehicle break-
ins. Valuable possessions (including travel documents, passwords, and money) are
frequently stolen. These break-ins happen commonly during the night, on the beach
in the south, and at rest stops near the highway. This is problematic for French and
foreign travelers.

36
 V. RISK ANALYSIS

Towards an acceleration of the recovery in the second half of the year.

The French economy will experience a strong recovery in 2021, after having
gone through an economic crisis of unprecedented proportions in 2020. The
confinement of the population and the closure of so-called "non-essential"
businesses had been decreed twice in 2020 and again in April 2021 to curb the
pandemic, before being gradually lifted in May and June. The easing of the
restrictions then allowed for a rapid recovery in activity. The continuation of this
recovery in the second half of the year will depend on the consequences of the fourth
wave of the pandemic, which should, however, be less penalizing for economic
activity, due to the rapid vaccination of the population (67% of the population had
received at least one dose in August 2021, 53% were fully vaccinated). Household
consumption, which had fallen in 2020, is the main driver of this rebound. As their
purchasing power was preserved during the crisis, thanks to the partial activity
scheme (which also made it possible to limit the rise in unemployment), households
have built up substantial savings, which they should largely spend, provided that the
health situation does not get out of hand. The evolution of the latter also conditions
investment by businesses, which continue to benefit from the support measures put
in place at the start of the crisis, such as the postponement (or even cancellation for
certain sectors) of the payment of social security contributions, the solidarity fund
and state-guaranteed loans (EUR 135 billion accumulated to June 2021). The
government is also supporting activity via a EUR 100 billion (4% of GDP) recovery
plan, two thirds of which should be committed by the end of 2021. The rebound of
the economy is therefore based on domestic activity, as the external situation

37
remains adverse. Aeronautics, the leading export sector (9% of the flow of goods
and services), remains very much affected by the air transport crisis, despite a
rebound in the second quarter of 2021 (sales up by 24% compared to Q1 2021, but
37% lower than Q1 2020). Tourism (8% of exports) remained hampered at the
beginning of the year by traffic restrictions: overnight stays fell by 48% in Q1 2021
(-70% for non-residents). Although the reopening of borders should allow an influx
of European tourists, the sector will remain hampered by health uncertainty, the
maintenance of certain constraints (introduction of the health pass for leisure
activities) and restrictions on intercontinental travel. After falling by 38% in 2020,
insolvencies have remained on the same trend in the first half of 2021 (-48%
compared with H1 2019), thanks to the support measures. Although 22,500
businesses are on probation and could go into default when these measures are
withdrawn, this will be gradual, thus postponing the rebound in insolvencies until
2022.

The reduction of the public deficit will wait and the recovery plan will take
precedence.

The public deficit will remain very high in 2021 after having increased
significantly in the face of the economic crisis. As the bulk of the support measures
have been extended several times for the sectors most affected, public spending has
been constantly revised upwards during the year (an additional EUR 20 billion will
be released in May 2021). The public debt therefore remains very high and its
sustainability will be one of the main challenges after the health crisis.

After a sharp increase in 2020, the current account deficit should narrow
somewhat in 2021, thanks to a slightly stronger rebound in exports than in imports.
Key export sectors, such as cosmetics, leather goods and wines and spirits,

38
experienced a solid recovery in the first half of 2021, driven by the Chinese and
American markets. Higher tourism receipts in the second half of the year should
increase the surplus in services. The current account deficit will continue to be
financed by debt or equity issues by non-residents.

39
 VI. CONCLUSION

France’s economy is the fifth largest in the world and represents around one fifth of
the Euro area gross domestic product (GDP). Currently, services are the main
contributor to the country’s economy, with over 70% of GDP stemming from this
sector. In manufacturing, France is one of the global leaders in the automotive,
aerospace and railway sectors as well as in cosmetics and luxury goods.
Furthermore, France has a highly educated labor force and the highest number of
science graduates per thousand workers in Europe. In the external sector, France’s
closest trading partner is Germany, which accounts for more than 17% of France’s
exports and 19% of total imports. France’s primary exports are machinery and
transportation equipment, aerospace equipment and plastics, while primary imports
include machinery, automobiles and crude oil. Additionally, France is the most
visited country in the world, making tourism a prominent sector in the economy.

40
APPENDIX

41
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