On this page we present the salient features of the current recovery in French Economy since the onset of the Great Recession in historical perspective, where the comparison is with the prior business cycles. We identify four business cycles in France given available data and the methods described elsewhere on our page. Two of the cycles seem mild and do not show substantial declines in Real GDP.
The Great Recession caused a substantial contraction in the Frency Economy. Real GDP declined by more than four percent, stayed flat for several quarters, increased very slowly for two years and is now flattening again, still short of the previous peak. The following graph shows the path.
Consumption in has recovered remarkably well but is growing more slowly than the historical experience would suggest.. Capital formation recovered for a while but is now sinking sharply. Residential capital formation fell more than 15 percent from the peak and shows no sign of recovering.
The Role of Government
The French entered the Great Recession with a significant and increasing stock of outstanding debt, but only moderately above Maastricht Treaty targets. The figure below shows the response as measured by the percentage change in government consumption from the peak of the cycle to the present. This essentially captures the level of Government spending. The final figure shows the change in Government Spending as a percent of GDP. Because GDP declined sharply this increased sharply at the beginning of the downturn.