Last Sunday April 24, France reelected Emmanuel Macron as President of the French Republic for a second 5 year term.
In 2017, at the beginning of his mandate, France’s GDP represented $2.59T or a GDP per capita of $38,781. The government debt accounted for 98.3% of the GDP. 2 years of economic slow down in the wake of the COVID pandemic led to a (8.0%) contraction of the GDP until 2021 and a long-awaited economic rebound. That year, the economy grew by 7.0%, the most in 52 years, and France’s GDP reached $2.94T or a GDP per capita of $42,600 (+9.8% compared to 2017). The government debt increased at the same time by an astonishing 33.7% in value to reach 115.8% of the GDP.
As a comparison, the US GDP represented $19.54T in 2017 or a GDP per capita of $60,109 increasing to an estimated $23.00T in 2021 or a GDP per capita of $69,231 (+15.2% compared to 2017). The US suffered only 1 year of economic decline in 2020 with a contraction of (3.5%) of its GDP. The government debt increased during the same time period from 106.0% to 137.2% of the GDP or another astonishing 52.3% jump in value.
The level of debt reached so far is unparalleled in history. The most the US ever incurred before was 121.2% of GDP in 1946 in the aftermath of WWII. Although some may say that this debt prevented the collapse of our health system and the welfare of our citizens, others may point out the poor returns on investment it provides in the light of the limited GDP gains achieved so far. The election of Emmanuel Macron is a call for stability and a rejection of uncertainty in the form of a closer adhesion to the European project and NATO. It can not make us forget though the fundamental challenges facing our economies. The FACC will continue to keep you abreast of the policies in place to tackle these challenges and prepare the ground for a sound prosperity.
Cédric Ballarin
