2017 Index of Economic Freedom

France

overall score63.3
world rank72
Rule of Law

Property Rights85.0

Government Integrity69.7

Judicial Effectiveness72.7

Government Size

Government Spending2.0

Tax Burden47.6

Fiscal Health57.0

Regulatory Efficiency

Business Freedom78.0

Labor Freedom44.1

Monetary Freedom81.6

Open Markets

Trade Freedom82.0

Investment Freedom70.0

Financial Freedom70.0

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Quick Facts
  • Population:
    • 64.2 million
  • GDP (PPP):
    • $2.6 trillion
    • 1.1% growth
    • 0.8% 5-year compound annual growth
    • $41,181 per capita
  • Unemployment:
    • 10.6%
  • Inflation (CPI):
    • 0.1%
  • FDI Inflow:
    • $42.9 billion
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France’s economy has proven to be relatively resilient, with entrepreneurial activity facilitated by such institutional strengths as strong protection of property rights and a fairly efficient regulatory framework. Various reform measures have been adopted to increase the economy’s competitiveness and flexibility, but overall progress has been marginal.

The state dominates major sectors of the economy and remains a large shareholder in many semipublic enterprises. Government spending accounts for more than half of total domestic output, and the budget has been chronically in deficit. Various stimulus measures have resulted in a deterioration of public finance, increasing the fiscal burdens imposed on French taxpayers.

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Background

François Hollande was elected president in May 2012, and his Socialist Party has majority control of the National Assembly. Hollande’s poor handling of the economy and public fears related to security have led to consistently low approval ratings. A recent spate of horrific terrorist attacks has shaken public confidence. France was a leading participant in NATO’s March 2011 military engagement in Libya and has sent troops to Mali and the Central African Republic to counter advancing Islamic militants. France began airstrikes against ISIS in spring 2015 and remains a major contributor to the anti-ISIS coalition. The economy is diversified with tourism, manufacturing, and pharmaceuticals as major industries.

Rule of LawView Methodology

Property Rights 85.0 Create a Graph using this measurement

Government Integrity 69.7 Create a Graph using this measurement

Judicial Effectiveness 72.7 Create a Graph using this measurement

Enforcement of property rights and contracts is secure, but regulation of real estate is complex and inefficient. France is a strong defender of intellectual property rights. An independent judiciary and the rule of law are firmly established. Although the government actively promotes transparency, accountability, and civic participation, corruption persists in such sectors as public works and the defense industry.

Government SizeView Methodology

The top individual income tax rate is 45 percent, and the top corporate tax rate is 34.3 percent. Other taxes include a value-added tax. The overall tax burden equals 45.2 percent of total domestic income. Government spending has amounted to 57.1 percent of total output (GDP) over the past three years, and budget deficits have averaged 3.9 percent of GDP. Public debt is equivalent to 96.8 percent of GDP.

Regulatory EfficiencyView Methodology

The overall regulatory framework remains relatively efficient, but the labor market is burdened with rigid regulations and lacks the capacity to generate more vibrant employment growth. The government maintains an extensive system of subsidies and price controls that affect a number of products and services. France is the largest recipient of subsidies under the European Union’s Common Agricultural Policy (CAP).

Open MarketsView Methodology

Trade is important to France’s economy; the value of exports and imports taken together equals 61 percent of GDP. The average applied tariff rate is 1.5 percent. Investment in some sectors is restricted, and state-owned enterprises distort the economy. The financial sector accounts for about 4 percent of GDP. The banking sector is mostly in private hands, but the state still owns several important institutions.

Country's Score Over Time

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Regional Ranking

rank country overall change
1Switzerland81.50.5
2Estonia79.11.9
3Ireland76.7-0.6
4United Kingdom76.40.0
5Georgia763.4
6Luxembourg75.92.0
7The Netherlands75.81.2
8Lithuania75.80.6
9Denmark75.1-0.2
10Sweden74.92.9
11Latvia74.84.4
12Iceland74.41.1
13Finland741.4
14Norway743.2
15Germany73.8-0.6
16Czech Republic73.30.1
17Austria72.30.6
18Macedonia70.73.2
19Armenia70.33.3
20Romania69.74.1
21Poland68.3-1.0
22Kosovo67.96.5
23Bulgaria67.92.0
24Cyprus67.9-0.8
25Belgium67.8-0.6
26Malta67.71.0
27Hungary 65.8-0.2
28Slovakia65.7-0.9
29Turkey65.23.1
30Albania64.4-1.5
31Spain63.6-4.9
32France63.31.0
33Portugal62.6-2.5
34Italy62.51.3
35Montenegro62-2.9
36Bosnia and Herzegovina60.21.6
37Croatia59.40.3
38Slovenia59.2-1.4
39Serbia 58.9-3.2
40Belarus58.69.8
41Moldova580.6
42Russia57.16.5
43Greece551.8
44Ukraine48.11.3
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