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OECD Economic Surveys: France 2011

image of OECD Economic Surveys: France 2011

The 2011 edition of OECD's periodic survey of the French economy.  This edition includes chapters covering the recovery, bringing down the public debt, making the housing market work better, and France's environmental policies.

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Assessment and recommendations

Relatively prudent lending practices, euro area monetary policy, domestic support measures and the size of automatic stabilisers, as well as the structure of output, substantially cushioned the impact of the global financial crisis on the French economy, with private consumption in particular holding up well. The policy of low interest rates was reflected in accommodative financial conditions throughout the economy, with France remaining largely unscathed by mounting risk aversion in some foreign sovereign debt markets. In many respects, France finds itself in an intermediate position amongst OECD countries in terms of the impact of the crisis. Buoyed by exceptionally favourable lending terms and conditions, the real estate market has turned around, as in many other countries, with prices rebounding to their record-high levels of mid-2008. The market would probably be vulnerable if rates were to go back up, but the overall situation is marked by a shortage of available housing in certain parts of the country, and there is a risk that a prolonged period of easy finance could result in a price bubble. While exports were dynamic in 2010, France’s foreign-trade performance has been disappointing over the long term, and the current-account deficit has been flat at roughly 2% of GDP.

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