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The coming depression blog | May 19, 2019

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Problems with the French Economy

Problems with the French Economy

European economies over the last few years have gone through crisis after crisis and many of the economies in Europe are still doing quite badly today. France is the 5th largest economy in the world in terms of nominal GDP and is said to be a very rich country in terms of aggregate household wealth. However in 2014, France has a very vulnerable economy and there are major concerns with the French economy, not just in Europe but all over the world. There are a number of problems with the French economy and political atmosphere in the country is not helping matters. The following are some of the major concerns of the French economy in 2014:

French Economic Problems – 2014
•    Standard & Poor’s has warned the entire Europe of a “stubborn phase of subdued growth”. This means that growth data in France is not likely to pick up in the near future.
•    France showed some really worrying economic data in October 2014. The Markit’s Flash Composite Output Index (PMI) was lower than expected which showed a deepening economic downturn in the economy of France.
•    France is expected to grow very slightly in 2014 which means the GDP growth in France is next to nothing and there are deep fears of no expansion or even recession in the French economy. French economy has to expand in order to solve its economic problems.
•    S&P also cut the outlook for France in October 2014 to negative from stable. This is a bad signal for the French economy as this means economic woes are still very much there in France. This means that the economic recovery process is not going as planned in France.
•    France today is dubbed as the sick man of the Euro Zone by many economists today. Considering that many countries in the Eurozone are facing an economic problem, that’s really saying something.
•    There are key structural reforms that need to be passed in France and then implemented in order to start the economic recovery process in France.
•    Stagnation is a real possibility in France and there is a real threat that France can slip into recession. The demand in France, like the rest of Europe is bad and this is further fueling economic woes in France. Moreover the manufacturing data out of France is also not very promising in 2014.
The above mentioned problems are serious in France and a lot has to be done to revive the economy for a path of recovery.

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