Depending in the source, France is listed as having the 5th or 6th largest nominal GDP in the world, with a purchasing power parity GDP of USD$1.87 trillion. Other sources somewhat differ, with the International Monetary Fund ranking the French economy as the 8th largest in the world, the World Bank estimating it as the 7th largest, and the United States’ CIA World Factbook listing France’s GDP at USD$2.067 trillion in 2008.

In 1999, France along with 11 other EU members launched the euro (€), which had completely replaced the French franc by early 2002. As of the summer 2008, the euro was trading at 1€ per USD$1.58. While France averaged an annual economic growth rate of 2% over the past decade, it—like other continental European economies—has seen relatively weak growth in recent years, with unemployment hovering nearly 7.5% in early 2008 (according to International Labour Organization statistics). France’s poverty rate, however, ranks as one of the lowest in the world (at 6%), and current government economic policy is squarely aimed at the promotion of investment and domestic business growth.

France also stands as an enormous recipient of foreign direct investment, coming in 2nd in the world on this measure in 2003 (at USD$47 billion—ahead of the United States, the United Kingdom, Germany, and Japan). France also ranks high in terms of their own foreign investments, with French companies investing more than USD$57 billion outside the country in recent years.

One concept that is crucial to an understanding of the French economy is that of dirigisme. Dirigisme was an ambitious program of modernization under state impulse and coordination that the nation embarked upon after World War II. Under this program, the state remained in control of certain key industries—such as transportation, energy, and telecommunications—while simultaneously providing incentives for private engagement in other key industries, sectors, and other economic and infrastructure-related projects. Deepening this program of dirigisme in 1982, socialist President François Mitterrand called for even more governmental control of the economy. Mitterand nationalized a number of important industries and a number of powerful, private banks. This drastic step led to widespread criticism of dirigisme, resulting in today’s more balanced mix of state involvement and ever-increasing rigueur, or corporatization.

Yet despite the significant liberalization that has taken place over the past decade, the French government continues to play a significant role in the economy as well as in industry, highly regulating labor and wage conditions, and owning shares in major corporations across a number of key economic sectors, including banking, energy, transportation, and telecommunications. Still, France currently has nearly 2.5 million registered companies and government intervention is thought to be slowly declining. The government has recently, for example, began selling off its holdings in Télécom and Air France, as well as in the insurance, banking, and defense industries.