With more than 58,000 cases in 2016 the number of business insolvencies was still about 5% higher than before the start of the credit crisis in 2008.
The insolvency environment
Despite decreases in 2016 and 2017, the insolvency level remains high
French business insolvencies decreased by about 8% in 2016, and in 2017 another 5% decline is expected, in line with the on-going (albeit modest) economic rebound. However, with more than 58,000 cases in 2016 the number of business insolvencies was still about 5% higher than in 2008.
Growth expected to remain below eurozone average
After several years of feeble GDP increases of less than 1%, in 2015 and 2016 the French economy grew 1.2% annually. However, this growth rate remained below the eurozone average (1.6% growth in 2016).
In 2017 and 2018 French economic growth is expected to increase only modestly, by 1.3% and 1.4% respectively; again below the eurozone average. Productivity remains an issue in the French manufacturing sector.
Unemployment, at least, shows a decreasing trend, which should benefit private consumption.
The 2008 credit crisis, subsequent government stimulus measures, and France’s only modest recovery have led to a sharp increase in public debt in recent years, up to 93% of GDP in 2016 from 67% of GDP in 2008. The French government has repeatedly missed meeting the Maastricht deficit threshold of 3% of GDP. Despite some austerity programmes, more measures to curb public spending are required, as public spending in France is the highest in the eurozone (57% of GDP).