Economic studies


Population 64.8 Million
GDP per capita 41,897 $US
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major macro economic indicators

  2018 2019 2020 (e) 2021 (f)
GDP growth (%) 1.8 1.5 -8.3 5.4
Inflation (yearly average, %) 2.1 1.3 0.5 0.9
Budget balance (% GDP) -2.3 -3.0 -10.8 -8.7
Current account balance (% GDP) -0.9 -0.8 -2.9 -2.6
Public debt (% GDP) 98.1 98.1 116.3 117.9


(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 to be driven by domestic demand

The French economy will record a strong catch-up in its activity in 2021, after having gone through an economic crisis of unprecedented proportions in 2020 due to the pandemic. In order to limit the spread, a lockdown was decreed in spring and again in November, although some non-essential activities, such as construction or manufacturing production, were able to continue in the autumn. While activity is expected, at best, to stagnate at the beginning of the year in a still difficult health context, the recovery is then expected to accelerate, in line with the gradual vaccination of the population. Household consumption, which fell in 2020 due to successive travel bans and uncertainty, will be the main driver of this rebound. Their purchasing power having been relatively preserved during the crisis thanks to the partial activity scheme (which also made it possible to limit the rise in unemployment), households have, on this occasion, built up precautionary savings, the use of which in 2021 will depend on their level of confidence, which will gradually improve with the health situation. Moreover, the evolution of the latter will also condition business investment, which will continue to benefit, at least at the beginning of the year, from the support measures implemented during the crisis, such as the deferral (or even cancellation for certain sectors) of tax and social security payments, the solidarity fund for microbusinesses and state-guaranteed bank loans (EUR 130 billion granted in 2020). In addition to these measures, the government will support activity via a recovery plan, with expenditure of around EUR 37 billion in 2021 (i.e. 1.6% of GDP, including EUR 10 billion of cuts in production taxes). The rebound in the economy will therefore be driven by domestic activity, insofar as the economic situation will remain adverse for the two main sources of growth on the external front. On the one hand, aeronautics, the leading export sector (9% of the flow of goods and services), will remain affected by the air transport crisis, after recording a fall in foreign sales in 2020 (-46% over 10 months). On the other hand, tourism (8% of total exports) will remain hampered for most of the year by traffic restrictions and fear, which had already led to a drop in the number of overnight stays between January and September 2020 (-48%, of which -70% for non-residents). Although the support measures should make it possible to limit the number of insolvencies, like in 2020 (-38%), it will rise again in 2021.


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

After having increased sharply in the face of the scale of the economic crisis, the public deficit will remain very high in 2021. Most support measures, such as short-time work (EUR 7 billion budgeted for 2021) and the solidarity fund (in sectors affected by restrictions), will be extended, at least in the first part of the year, in line with the health situation. While their cost is expected to be lower than in the previous year due to their progressive phasing out, the measures included in the recovery plan will come into force, meaning that public expenditure will remain significant (60% of GDP). As a result, public debt will remain very high, at almost 120% of GDP, having been one of the few in the Eurozone not to decline in the years before the pandemic, despite favourable economic conditions. Once the health and economic crisis is over, the sustainability of public finances will be one of the main challenges.

The current account deficit is expected to shrink slightly in 2021, after having increased sharply in 2020 due to the worsening of the deficit in the balance of goods (3.2% of GDP in the first three quarters) and the contraction of the surplus in the services sector (0.3% of GDP), due to tourism. Although still limited, tourism receipts will pick up again, especially in the second half of the year. With the exception of aeronautics, the other flagship export sectors (automobiles, cosmetics, leather goods, wines and spirits) are expected to record better performances, which will however be offset by a clear rebound in imports, in line with domestic demand. The large current account deficit will continue to be financed by debt or share issues subscribed by non-residents.


New Prime Minister on the eve of the presidential campaign

In power since 2017, President Macron and his centre-liberal party, La République En Marche (LaREM), may no longer have a majority in the National Assembly (271 seats out of 577) since the defection of 17 deputies in May 2020, but can still rely on the centrists Modem (57 deputies) and Agir (20). Following the setback suffered in the municipal elections of June 2020, President Macron appointed Jean Castex, the head of the post-lockdown opening-up strategy, to succeed Edouard Philippe as Prime Minister. Although these elections were marked by the breakthrough of the ecologist party EELV, the polls conducted at the end of 2020 suggest, with a view to the 2022 presidential election, a new duel between LaREM and Rassemblement National (far right), with 25% of the votes each in the first round. Nevertheless, although the historic parties of the left (Socialist Party) and right (Republicans) seem to be in difficulty, the choice of their candidate could reshuffle the cards of the presidential campaign, in which Jean-Luc Mélenchon, leader of La France Insoumise (far left, 11%), has already announced that he will participate.

Last updated: March 2021


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