Economic Analysis


Population 65.4 million
GDP per capita 45,188 $US
Country risk assessment
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major macro economic indicators

  2020 2021 2022 (e) 2023 (p)
GDP growth (%) -8.0 7.0 2.5 0.3
Inflation (yearly average, %) 0.5 1.6 5.9 5.0
Budget balance (% GDP) -9.0 -6.5 -5.0 -5.6
Current account balance (% GDP) -2.5 -0.8 -2.5 -1.7
Public debt (% GDP) 115.0 112.8 111.7 112.2

(e): Estimate (f): Forecast


  • Quality of infrastructure and public services
  • Skilled and productive workforce, dynamic demographics
  • Tourism power
  • Competitive international groups (aerospace, energy, environment, pharmaceuticals, luxury goods, food processing, retail)
  • Global agricultural powerhouse
  • High level of savings


  • Insufficient number of exporting companies, loss of competitiveness and market share
  • Weakening of the product range, insufficient innovation efforts
  • Low employment rate of young people and senior citizens
  • Room for improving the efficiency of public spending
  • High public debt
  • Growing private debt

Risk assessment

Recovery held back by the consequences of the war in Ukraine

The economy rebounded strongly in 2021, following the lifting of most of the pandemic-related restrictions in the second half of the year, with year-end GDP at 1% above its pre-crisis level. However, in 2022, the recovery is expected to stall due to the consequences of the war in Ukraine. The soaring prices of many commodities (oil, gas, metals, cereals) will fuel inflationary pressures which, although slightly less significant than elsewhere in Europe thanks to the limitation of the increase in the prices of electricity and gas (tariff shield), will remain significant throughout the year. Despite a still high savings rate (17.4% of gross disposable income at the end of 2021, compared with 15% before the crisis), household consumption will slow down significantly, in this context of loss of purchasing power and high uncertainty, which favours precautionary savings. Businesses will also be affected, as they will face a surge in production costs, which will come on top of supply difficulties - expressed by 45% of businesses in industry at the end of 2021. This is even more true as recruitment difficulties, which, in March 2022, affected 77% of companies in construction, 61% in industry and 54% in services, will persist throughout the year. Thus, despite a profit margin still about one point above its pre-crisis level (32.8% at the end of 2021) and the lowering of the corporate tax rate to 25% for all companies (compared with 26.5% or 27.5% in 2021, depending on the size), business investment should be limited in 2022, in an environment that is both adverse and uncertain. Concomitantly, despite limited trade with Russia - which accounted for 1.3% of exports and 1.6% of imports in 2021 - the external situation will also remain deteriorated, with the conflict leading to a sharp slowdown in activity in Europe and, consequently, in external demand. This will hamper the rebound of key sectors such as aeronautics, the leading export sector (9% of flows of goods and services) and the automotive industry (9%). The return to normalcy of the tourism industry (8% of exports), still dependent on the health situation, could also be jeopardised by the loss of income of European households. However, public spending should continue to support activity, as the remaining 30% of the EUR 100 billion France Relance plan (4% of GDP) should be committed in 2022. Despite continued strong state support, insolvencies - which remained at historic lows in 2021 (-46% compared with 2019) - should rebound in 2022 given the unfavourable context.


This time, the public deficit is widened by the resilience plan

After a sharp increase due to the pandemic, the public deficit will remain high in 2022, this time due to measures taken to deal with the consequences of the war in Ukraine. In addition to the long-standing cuts in the house tax and corporate tax rates, energy taxes were reduced, fuel prices were rebated and subsidies were provided to energy-using companies. Furthermore, most of the support measures implemented during the pandemic have been extended (tax deferrals, partial activity) or even reinforced (raising the ceiling for state-guaranteed loans) for companies affected by the crisis. Public debt will therefore remain very high and its sustainability will be one of the main challenges in the medium-term.

Despite the expected recovery in tourism, the current account deficit is expected to widen again in 2022, due to soaring energy imports. It is financed by the issuance of debt or listed shares purchased by non-residents. At the end of 2021, non-residents held 47% of the securities issued by public administrations, and more than half of those issued by non-financial companies (58%) and French banks (67%).


Political scene increasingly polarised despite President Macron's re-election

In power since 2017, President Macron, of the centre-liberal La République En Marche (LaREM) party, was re-elected for a second term in April 2022. While he won again in the second round against Marine Le Pen of the far-right Rassemblement National, the score was much closer this time around (58.5%-41.5%, compared to 66%-34% in 2017). The presidential election was marked by the confirmation of the collapse of the traditional parties (the Republicans on the right and the Socialist Party on the left, which obtained less than 5% and 2% of the votes in the first round, respectively), the excellent score of Jean-Luc Mélenchon (LFI, far left, 22%) and the appearance of another far-right candidate, Eric Zemmour (7%). In this configuration, the legislative elections of June 2022 look uncertain and President Macron could be forced to form a coalition to secure a majority in the National Assembly. Regardless of the outcome of this election, the increasing polarisation of the French political scene increases the risk of political and social instability.


Last updated: April 2022


Bank cards are now the most commonly-used form of payment in France, although cheques are still widely used. In value terms, cheques and transfers are still the most popular forms of payment.

If a cheque remains unpaid for more than 30 days from the date of first presentation, the beneficiary can immediately obtain an enforcement order (without need for further procedures or costs). This is based on a certificate of non-payment provided by the creditor’s bank, following a second unsuccessful attempt to present the cheque for payment and when the debtor has not provided proof of payment within 15 days of receipt of a formal notice to pay served by a bailiff (Article L.131‑73 of the Monetary and Financial Code).

Bills of exchange, a much less frequently used payment method, are steadily becoming rarer in terms of number of operations – although they remain important in terms of total value. Bills of exchange are still an attractive solution for companies, as they can be discounted or transferred and therefore provide a valuable source of short-term financing. Moreover, they can be used by creditors to pursue legal proceedings in respect of “exchange law” (droit cambiaire) and are particularly suitable for payment by instalments.

Bank transfers for domestic or international payments can be made via the SWIFT electronic network used by the French banking system. SWIFT offers a reliable platform for fast payments, but requires mutual confidence between suppliers and their customers. France is also part of the SEPA network.

Debt collection

Unless otherwise stated in the general sales conditions, or agreed between the parties, payment periods are set at thirty days from the date of receipt of goods or performance of services requested. Interest rates and conditions of application must be stipulated in the contract – otherwise the applicable interest rate is that applied by the European Central Bank in its most recent refinancing operations. Throughout the first half of the year in question, the rate applicable is that in force on January 1 and for the second half year in question, the rate applicable is that in force on July 1.


Amicable phase

During this phase, the creditor and the debtor try to reach an amicable solution via direct contact in order to avoid legal procedures. All documents signed between the parties (such as contracts and invoices) are analysed. Where possible, the debtor can be granted an extended time period to pay his debts, with the period’s length negotiated as part of the amicable settlement.


Legal proceedings
Order for payment (injonction de payer)

When a debt claim results from a contractual undertaking and is both liquid and undisputable, creditors can use the injunction-to-pay procedure (injonction de payer). This flexible system uses pre-printed forms and does not require the applicants to argue their case before a civil court (tribunal d’instance) or a competent commercial court (with jurisdiction over the district where the debtor’s registered offices are located). By using this procedure, creditors can rapidly obtain a court order which is then served by a bailiff. The defendant then has a period of one month in which to dispute the case.


Fast-track proceedings

Référé-provision provides creditors with a rapid means of debt collection. If the debtor is neither present nor represented during the hearing, a default judgment can be issued. The court then renders a decision, typically within seven to fourteen days (though same-day decisions are possible). The jurisdiction is limited to debts which cannot be materially contested. If serious questions arise over the extent of the debt, the summary judge has no jurisdiction to render a favourable decision. Judgments can be immediately executed, even if the debtor issues an appeal.

If a claim proves to be litigious, the judge ruled competent to preside (juge des référés) over urgent matters evaluates whether the claim is well-founded. If appropriate, the judge can subsequently decide to declare himself incompetent to rule on the case. Based on his assessment of whether the case is valid, he can then invite the plaintiff to seek a ruling through formal court procedures.


Ordinary proceedings

Formal procedures of this kind enable the validity of a claim to be recognised by the court. This is a relatively lengthy process which can last a year or more, due to the emphasis placed on the adversarial nature of proceedings and the numerous phases involved. These phases include the submission of supporting documents, written submissions from the litigants, the examination of evidence, various recesses for deliberations and, finally, the hearing for oral pleadings (audience de plaidoirie).

Proceedings are issued through a Writ of Summons (Assignation) which is served on the debtor 15 days before the first procedural hearing. During this hearing, the court sets a time period for the exchange of pleadings and discovery. Decisions rendered do not necessarily have the possibility of immediate execution. In order to be executed, they must first be served on the debtor. They are also subject to appeal.

Enforcement of a legal decision

Unless the court decision is temporarily enforceable, enforcement can only commence if no appeal is lodged within one month and must occur within ten years of notification of the court’s decision. Compulsory enforcement can be requested if the debtor does not comply with the judgment. Obligations to pay can be enforced through attachment (of bank accounts or assets) or through a third party which owes money to the debtor (garnishment).

France has adopted enforcement mechanisms for decisions rendered by other EU member countries. These mechanisms include the Payment Order under the European Enforcement Order. Decisions rendered by non-EU members can be recognised and enforced, provided that the issuing country is party to a bilateral or multilateral agreement with France. In the absence of an agreement, claimants are obliged to use the French exequatur procedure.

Insolvency proceedings

French insolvency law provides for six procedures to undertake restructuring or avoid insolvency. These are either assisted proceedings or proceedings controlled by the court.


Assisted proceedings

These can be either mandated ad hoc or via conciliation proceedings. Both are informal, amicable proceedings, where creditors cannot be forced into a restructuring agreement and the company’s management continues to run the business. These negotiations are governed by contractual law throughout their duration. The proceedings are conducted under the supervision of a court-appointed practitioner (a mandataire ad hoc, or a conciliator) in order to help the debtor reach an agreement with its creditors. Both of these types of proceedings are confidential but conciliation can eventually be made public if the debtor has the approval of the commercial court. Nevertheless, the terms and conditions of agreements remain confidential and can only be disclosed to signatory parties.


Court-Controlled proceedings

The four types of court-controlled proceedings are judicial reorganisation, judicial liquidation, sauvegarde, and Accelerated Financial Sauvegarde proceedings (AFS).

In all four proceedings, any pre-filed claims are automatically stayed. Creditors must file proof of their claims within two months of publication of the opening judgment, or four months for creditors located outside France. Debts which arise after proceedings commence are given priority over debts incurred beforehand. Certain types of transactions can be set aside by the court, if they were entered into by the debtor during a hardening period (before a judgment opening a judicial reorganisation or a judicial liquidation).

With Court-Controlled proceedings there can be variations in the extent of involvement of the court-appointed conciliator. The sauvegarde and AFS procedures are debtor-in-possession proceedings, but with judicial reorganisation, the court can decide whether to set aside the company’s managers. The role of management is particularly reduced in cases of judicial liquidation, as the debtor company usually ceases to conduct business. Nevertheless, the court can decide for a business to continue operating under a court-appointed liquidator.

Insolvency trends France
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