GDP (Million $) – 3.130.014
GDP Per Capita ($) – 47.359
Growth Rate (%) – 0,74
Population – 66.092.000
Total Area (km2) – 543.945
Capital – Paris
Source: IMF, April 2024
France is located at the center of the European Union due to its geographical location. It is an ideal crossroads for access to important industrial and commercial points in other countries of the Union. It is located at the crossroads that unites the Po plain, the industrial center of Italy, from the south, the industrial centers of England to the North West, and the Mediterranean region, which stretches from the Catalan region of Spain to the middle of Italy in the southeast.
In particular, coal and iron ore resources played an important role in the enrichment of France. However, coal reserves have decreased considerably, and state-owned coal enterprises were closed in 2007. On the other hand, the reserves in the Loraine region, which once had rich iron deposits, have now come to an end. For this reason, the iron and steel factories near Dunkirk and in Fost work with imported inputs.
According to current prices, France is the 7th largest economy in the world out of 196 countries as of 2024. [U.S. 1st ($29 trillion), Turkey 18th ($1 trillion)]. GDP, which is estimated to be 3 trillion dollars in 2024 according to current prices, is expected to be 3 trillion dollars in 2025. GDP, which is expected to increase by 0.7% at constant prices in 2024, is estimated to increase by 1.4% in 2025. (IMF-2024)
According to World Bank data, in 2023, the share of the agricultural sector in the country's GDP was 1.9%, the share of the industrial sector was 18.7%, and the share of the services sector was 69.2%. When the French economy is evaluated on the basis of sectors; In the manufacturing sector, primarily the chemical industry, automotive, aviation and arms industry are the strongest sectors.
FOREIGN TRADE
France, which ranks 7th in the world with a share of 2.7% with exports of 634.5 billion dollars (up 4%) in 2023, exports to Germany, Italy, Belgium, Spain, and the USA. Turkey ranked 11th with a 2% share in the country's exports. In the same year, it has a share of 3.3 in world imports with 775 billion dollars of imports and its imports decreased by 5% compared to the previous year. The country, which ranks 6th in the world, is the 3rd importer among European countries.
The most important product groups in France's exports to the world are machinery, aircraft, motor vehicles, electrical machinery and devices, pharmaceuticals, essential oils and cosmetics, plastics and products, alcoholic and non-alcoholic beverages, iron and steel and mineral fuels.
The most important product groups of the country in imports are machinery, motor vehicles, mineral fuels and oils, electrical machinery and devices, pharmaceutical products, plastics and products, optical photography measurement medical instruments and devices, organic chemicals, iron and steel and iron and steel goods.
According to the 2023 World Investment Report published by UNCTAD, foreign direct investment flows to France increased from $31 billion in 2021 to $36 billion in 2022. It is the 10th country that received the most investment in 2022. The country's investment abroad in 2022 is $48 billion, ranking 12th in the world with this value.
INDUSTRY
France's leading industrial enterprises operate in the machinery, chemistry, automobile, metallurgy, aircraft, electronics, textile, food processing sectors. The regions with the highest concentration of 274 thousand industrial establishments, which create more than 3 million jobs throughout the country, are AuvergneRhone-Alpes, Ile-de-France and Nouvelle Aquitaine, respectively.
When the sub-expansions of the industrial sector are examined, it is understood that mining and quarrying, energy, water supply (+5.9%), transportation equipment manufacturing (+6.6%) and machinery and equipment products manufacturing (+2.1%) increased significantly in the last year. A strong increase was recorded in 2023 in the manufacture of coke and refined petroleum products (+23.5%), which had previously been hit by strikes affecting refineries in October 2022. The improvement in industrial production was partly due to the good performance of the electricity sector. On the other hand, production decreased in the food products and beverage manufacturing (-3.5%) and "other manufacturing" sectors (-0.7%).
In France's foreign trade, exports of industrial products reached 576.8 billion euros in 2023, an increase of 3% compared to the previous year. Aircraft, automotive, pharmaceuticals, machinery and equipment and chemicals are the most exported areas. In terms of imports, automation products used in construction, machinery and equipment, pharmaceuticals, chemicals, electrical equipment, refined petroleum, products used in aircraft manufacturing, ready-to-wear and automotive sub-industry are the leading sectors, and industrial products worth 699.45 euros were outsourced, a decrease of 8% compared to 2022.
MACHINERY AND EQUIPMENT INDUSTRY
In 2024, France's machinery and equipment industry remains a significant contributor to its economy, despite mixed growth trends in recent years. The overall machinery market, which includes sectors like agricultural, mining, and construction equipment, generated revenues of approximately €5.7 billion in 2022. The construction equipment segment was the largest, accounting for over half of the market's value. However, the industry's growth rate has been relatively modest, with a compound annual growth rate (CAGR) of only 0.1% between 2017 and 2022.
For 2024, the machinery and equipment manufacturing industry in France is expected to be valued at €57.2 billion, marking it as the fourth-largest in Europe. Despite this, the sector has faced some challenges, with a decline in growth between 2019 and 2024 due to various external factors. Nonetheless, there is optimism for moderate growth between 2024 and 2029.
France also ranks second in Europe in the industrial machinery and equipment installation sector, with revenues projected at €13.3 billion for 2024. This segment includes the installation of machinery across various industries, including communications and medical equipment.
The French machinery market remains competitive, with companies like Caterpillar, Deere & Company, and CLAAS KGaA mbH holding strong positions.
AUTOMOTIVE INDUSTRY
France's automotive industry continues to evolve, particularly with a strong focus on electric vehicles (EVs) and sustainability. After a significant 15.9% rise in vehicle sales in 2023, reaching around 1.77 million units, the market is now facing some headwinds, with slower growth projected for 2024. The push towards electrification is a key driver, with the French government offering incentives to boost EV adoption, though challenges like high costs and range anxiety persist for consumers.
France remains a critical player in the European automotive landscape, with major manufacturers such as Renault, Peugeot, and Citroën driving innovation, particularly in electric and hybrid models. However, demand fluctuations and the transition towards greener technology are influencing production and sales strategies. The market for electric vehicles is set to grow by 8.5% annually from 2024 to 2029, indicating a long-term shift towards electrification.
Overall, while there are short-term challenges in 2024, including high costs and evolving consumer preferences, the French automotive industry is steadily moving towards a greener, more connected future.
In addition, the rise of smart, connected vehicles is pushing for more precise and durable connection systems, especially as vehicles become more reliant on electronics and sensors. These trends indicate that the automotive and fastener industries in France are becoming increasingly intertwined, with the performance of one directly influencing the advancements in the other.
AEROSPCE AND DEFENCE INDUSTRY
France's aerospace and defense industry is among the strongest in the world, driven by major companies like Airbus, Thales, Dassault Aviation, and Safran. In 2024, the industry continues to benefit from strong demand for both defense equipment and commercial aerospace products.
The defense sector, valued at around USD 61.5 billion in 2023, is projected to grow at a compound annual growth rate (CAGR) of 4.01%, reaching approximately USD 91.1 billion by 2033. Geopolitical tensions, particularly the war in Ukraine, have spurred a significant increase in defense spending. The French government has ramped up production of military equipment, including ammunition and autonomous defense systems, to meet both domestic and international demand.
Aerospace is closely linked to defense, with innovations in AI, automation, and data analytics driving advancements. French aerospace companies are at the forefront of producing cutting-edge aircraft, satellites, and unmanned aerial systems (UAVs). For example, Airbus and Dassault are key players in military aviation and space technology, while Thales focuses on integrating AI into defense systems. New initiatives, like Thales' AI-based data analysis platform Cortex, help armed forces enhance decision-making.
These sectors will continue to expand as France positions itself as a global leader in aerospace and defense, supported by substantial government investments and technological innovations.
IRON AND STEEL INDUSTRY
As of mid-2024, France's steel production faced a notable decline, with an 8.8% reduction in July compared to the same month in 2023, totaling around 750,000 tons. Despite this drop, a recovery trend was observed with a 3% increase in production compared to June 2024. Overall, from January to July 2024, France's total steel production rose by 3.9% to approximately 5.91 million tons.
France's position in global steel production has slipped to 19th place, underscoring the industry's struggles amidst competition. Factors contributing to this include high energy costs and stringent environmental regulations, which have particularly impacted production methods like electric arc furnaces. This has led to concerns about the industry's international competitiveness.
The iron and steel import landscape in France shows significant reliance on neighboring countries. Key suppliers include the Netherlands, Belgium, and Germany, which collectively contribute a substantial share of France's imports.
