La Défense in Paris could become the EU’s main trading centre after Brexit © Getty Images
La Défense in Paris could become the EU’s main trading centre after Brexit © Getty Images

Country spotlight: France

22 February 2019

POPULATION 65,233,271

AREA 643,801 km²

THE HELICOPTER VIEW As well as being one of the world’s most popular tourist destinations, France is in the top 30 for GDP per capita and 20th in the Legatum Prosperity Index. Post-Brexit, La Défense is aiming to take over London’s top spot as the EU financial hub.  

ECONOMIC OUTLOOK The country has the seventh largest economy in the world, with a GDP of $2.9tn and expected annual growth of 1.7% in 2019 and 2.2% in 2020. France is one of the global leaders in the automotive and aerospace sectors.

BIGGEST INVESTORS Investment into France increased by 42% in 2017 (from US$35bn to $50bn). Luxembourg, the Netherlands, the UK and Switzerland are the main investors, and represent more than 50% of the FDI stock. Others include the US, Germany and Italy.

SUPPLY CHAIN ISSUES With beauty exports valued at $8.69bn, issues have been reported of environmental, social and governance risks associated with cosmetics ingredients. Yellow-vest protests have also impacted supply chains, with an estimated €4.4bn in economic loss.

STRENGTHS France upholds its status as Europe’s third power, and sixth largest exporter, benefitting from its highly skilled workforce, large industrial base, abundance of agricultural resources and its geographic location at the centre of Europe.

CHALLENGES A high corporate tax rate tends to have a negative effect on overseas investors. While social policies have improved, high unemployment rates are a concern.

BOTTOM LINE To adapt after Brexit, the French labour force needs to look towards SMEs and vocational training in its leading sectors, but strategic domestic investments in renewable energy put France in a good position.

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