IntroductionFrance many other big exports such as

IntroductionFrance which is the world’s most traveled country in 2016 with 82.6 million visitors, is also the seventh largest economy in the world and the third largest economy in Europe based on a nominal GDP $2.42 trillion. Tourism is the leading source of income for France with iconic tourist locations such as the Eiffel Tower, Louvre Museum, and the Palace of Versailles. Energy is another major part of the French economy, they are one of the world leaders in Nuclear energy, home of big energy companies such as Areva, EDF and GDF Suez, France runs on a majority of Nuclear Energy. France has many other big exports such as agriculture, industry and other services are the leading reasons France boasts one of the top economies in the world. However, a top economy does not go without having risk. One major risk is France’s unemployment rate with a 9.8% unemployment rate. ExportsFrance is the sixth largest export economy in the world, exporting $485 billion. France’s leading export is aerospace, making Planes, Helicopters, and Spacecraft accounting for $45 billion, French company Airbus is one of the leading Airplane manufacturers in the world. Airbus is also one of the leading Aerospace and Defense manufacturers in the world. The next highest export for France is Packaged Medicaments accounting for $22.7 billion. A majority of this is cosmetics and pharmaceuticals, the French cosmetic giant L’oreal among many others set up headquarters in Paris. In addition to cosmetics, a majority of France’s exports include pharmaceuticals, a leading force to this success is the successful Pharmaceutical MNC Sanofi, which is Headquartered in Paris. Due to the amount of French Automobile Manufacturers such as Bugatti, Peugeot, Citroen and Renault; France exports roughly $18.4 billion in Cars. They also export roughly $11.7 billion in vehicle parts.The minority of France’s exports include: Agriculture, France is the sixth largest agricultural producer and the leading agricultural producer in the EU. This includes wheat, dairy products, meat, cheese and other fruits. Beverages, this includes wine, and other spirits, such as Hennessy, a Cognac distillery who are headquartered in France. In addition to the cosmetics luxury items such as perfumes and luxury clothing are also exported, with Dior operating from France. France’s majority trading partners include mainly the other countries in the EU. Germany is the top export location for France with 16% of their exports, for roughly $78.9 billion. Other European countries France exports to include Spain, Italy, the United Kingdom, each with around 7% and worth roughly $35 billion. The main country outside of the EU that France trades with is the United States, they account for about 7.4% of France’s exports worth around $36 billion.ImportsThe leading imports of France is Machinery accounting for 12.2% of their total imports. Machinery includes Turbo-Jets, since France is a leading airplane manufacturer, Computers, printing machinery, engine parts for their car manufacturing and centrifuges for the pharmaceutical manufacturing. The next biggest import is vehicles, accounting for 10.6% of total imports. With mainly Peugeot and Renault as their leading car manufacturers this leaves a big need in the car market. Outside of cars, the imported vehicles include parts, trucks, tractors, motorcycles, and other specialized vehicles like public transport vehicles. Electronics account for the third highest import at 9.2% of the total imports. The leading electronic imported are Smartphones, France does not have a major smartphone or electronics manufacturer, especially among the most popular such as Apple and Samsung. Other than phones, smaller electronic parts such as circuit boards and other electronic hardware make up the other minority of the electronic imports. The final majority import of France is Fuel, particularly Fossil Fuel. Although France is a country that is one of the leading forces in Nuclear energy, they still import a large amount of fossil fuels. Among the top sources of fuel, Crude oil, processed petroleum oils, petroleum gases, and coal rank among the fuel imported by France. Similar to France’s export partners, they conduct a lot of their business among the other EU countries. France’s biggest trade partner Germany, accounting for 17% of their imports, other main European countries who France imports from are Italy with 7.8%, Belgium with 7%, and Spain with 6.6%. Major countries outside of the EU that France imports from is China at 9.4% and the United States with 7.3% of the total imports.  Balance of Payments The balance of payments accounts for all of the international monetary transactions found within an allocated time period. The BOP, in this case, is calculated every quarter and every calendar year. The narrow definition of the BOP is that it showcases the capital account, although this excludes central bank reserves. The primary aspect to note is that when all of the components are in balance, there is no overall surplus or deficit. If a country continuously imports more than it exports, for example, the trade balance will begin to hinge on a deficit. On the alternative side, this “shortfall” will be counterbalanced in several ways, one being that additional funds will be earned from foreign investments, either through reserves or loans from other countries. The balance of payments is upheld through three main components – capital account, financial account, and current account. The capital account overviews the net change in national ownership of assets. It is composed of capital transfers and the acquisition/disposal of non-financial assets as well. An example of non-financial assets can be land ownership. Capital transfers are always required when there is no “favorable” exchange for the transfer of ownership of fixed assets, or during debt relief. From the years of 2002-2008, the capital account of France either drastically increased or decreased, allocating an average of $-506.14M. Although the account was in a drastic deficit at the 2003 period, it asserted great improvement for the next few years. The financial account is generally composed of long-term investments such as the production of buildings, or manufacturing plants in general. Additional investments can include loans or capital flows into bank accounts. A reserve account is incorporated within the financial account as well, and is operated by the nation’s central bank. Inbound capital flows, when combined alongside with a surplus of the current account, cause a rise in value which is appreciation; meanwhile, outbound flows can alternatively cause a fall in value. From the years of 2002-2008, the performance reflected a timeline similar to the one of the capital account, with France being a fairly large deficit at first, starting with -17,268M and ending 2008 with 78,115M. In summation, it is clear that the portfolio investments were fairly negative until 2007, and then drastically increased. Lastly, the current account sums up the trade balance on services and goods, net income payments, etc. The trade balance on goods is calculated when the value of imports is subtracted from the value of exports. Net income payments, in addition, dictate the amount of income generated from foreign assets. A trade surplus can assist the current account (more Euro flows into France and enhances the value), while a deficit decrease the standing (exerts downward pressure on the value of the Euro). From the years of 2002 to 2008, the status of the current account continuously decreased. The primary reason for this would be the vast increase in imports and payments on the imports. In regards to the current standing, the deficit of the French BOP increased to 5 Billion in the month of October of 2017, which is a large increase from simply the month before which consisted of 4.6 Billion. It was marked as the largest trade deficit, as imports climbed higher than exports. The rise of imports marked a 1.1% increase in change (EUR 45.4 Billion), meanwhile exports rose at a much slower 0.4% (40.4 Billion). Throughout the years of 1970 to 2017, the BOP of France overviewed an all-time high of 2674 EUR Million, but saw a record low of -7953 EUR Million in January of 2017. Financial conditions  The ups and downs of inflation was one of the major events in 2015 and had a serious impact on the economy of France and even of most European countries. However, the economic data released by 2017 show that the trend of economic recovery in France is increasingly clear and the economic growth is expected to reach 1.6% in 2017, which will be the highest economic growth rate in France since 2011; at the same time, the unemployment rate will be Continue to decline. As the same time that the GDP growth of France in 2017. in addition, it is estimated that 227,000 jobs will be created in 2017 as compared with 255,000 new posts job last year. New jobs are mainly concentrated in the service industry, industrial jobs will continue to suffer losses.DeficitAs the chart shows, the French national deficit has been declining steadily from 2011 to 2016, and its share of GDP has been declining. A budget deficit is an indicator of financial health in which expenditures exceed revenue. So this information is a good sign. The financial crisis made the economic growth of France slow and the growth of GDP slowed down. The French government though economic austerity which is a way through increase taxes by 20 billion euros (mainly by increasing taxes on the rich) and reduce by 10 billion euros to reduce the deficit.Credit rating The table shows that major credit rating agencies generally giving a higher rating the credit rating of France and that also shows that the recent economic situation in France is relatively stable.Currency valuation  Since 2002, the franc stopped legal circulation, the euro became the only legitimate currency in the euro area (France is included). The euro has a good demonstration of the regional economic integration. It has contributed to the development of regional economy and currency circulation. Recently years, European Central Bank to reduce the scale of debt. The ECB also increased short-term bond purchases, keeping the yield below deposit rates. Since then, the European Central Bank may maintain the scale of monetary stimulus, rather than to scale up again. The long-term outlook for quantitative easing in the euro zone will further strengthen the market.