1EvolutionofGDPinPercentageandValue
1.1Methodology
ThisreportexaminestheevolutionofFrenchGDPsince1945,basedonavailablehistorical data,primarilyfrom1960onwardfornominalvaluesduetotheavailabilityofofficialsources. Datapriorto1960areestimatedfromhistoricalgrowthratesandaggregatedseriesprovidedby INSEEandtheWorldBank.Wewillanalyzetheevolutioninvalue(nominalGDPincurrent euros)andpercentage(realgrowthin2010chainedprices),aswellasderivedindicatorssuchas GDPnetofthepublicdeficit(aswewilldiscussinSection 2)andGDPnetofpublicspending (aswewilldiscussinSection 3).Dataaresourcedfromofficialinstitutions:INSEEfornational accounts,theBanquedeFranceforpublicdeficits,theOECDandIMFforrecentprojections, andtheWorldBankforseriesindollarsconvertedtoeuros.Estimatesfor2024arebasedon anOECDgrowthprojectionof 1,1%,adjustedtoreflectrecenttrends.Tablesareconstructed withfive-yearintervalstocapturemajortrends,withspecificyears(e.g.,2008,2020)toreflect majoreconomiccrises.Currencyconversionsuseaverageannualexchangeratespublishedby theBanquedeFrance,anddataareharmonizedforconsistency.
1.2Analysis
Since1945,FrenchGDPgrowthhassteadilyincreasedinnominalterms.NominalGDProse from 10,2 billioneurosin1945to 2811,2 billioneurosin2023,andisestimatedat 2874,6 billion eurosin2024(equivalentto 3174,10 billionUSDin2023pertheIMF).However,thisindicator alonedoesnotprovideapreciseviewofitscomposition.FrancesnominalGDPhasseen exponentialgrowthsince1960,risingfrom 37,4 billioneuros(62,23 billionUSD)to 2811,2 billion euros(3051,83 billionUSD)in2023.Thisevolutionreflectseconomicexpansion,interrupted bycrisessuchas2008(a 7,7% declinein2009)andthe2020pandemic(a 7,8% decline). Theaverageannualnominalgrowthrateisapproximately 5% overtheperiod,influencedby inflationandrealgrowth.TheGDPgrowthratehasslowedoverthedecades,fromahigh of 5,7% duringtheTrenteGlorieuses(19451973)to 0,9% in2023post-2008crisis.Inrecent years,growthreboundedto 6,8% in2021aftera 7,8% dropin2020. Whatwecanobserve,withthereboundsinthe1970sand2000s,isthelinktosupply-side dynamics.First,the1973oilshockimposedpricesonbuyers.Second,the2000internetbubble materializedthedisconnectbetweenmarketsandtheintrinsicvalueofcompanyvaluations.
Table1: MajorTrendsinFrenchGDPEvolution(1945–2024)
PeriodAverageGrowth(%) EconomicPhase
1945–1973 5,5 TrenteGlorieuses(stronggrowth) 1974–1980 2,8 Oilshocks(slowdown) 1981–2007 2,2 Economicmaturity(moderategrowth)
2008–2009 2,9 Globalfinancialcrisis(recession) 2010–2019 1,4 Post-crisisrecovery(weakgrowth) 2020 7,8 COVID-19crisis(historiclow) 2021–2024 2,8 Post-COVIDrebound(moderategrowth)
Table2: *
Comment:From1945to2024,averagegrowthrangesfrom 5,5% (19451973)to 2,8% (20212024).Themaximumis 5,5% (19451973),theminimum 7,8% (2020).
1.3InternationalComparison
TobetterunderstandthelinkbetweenrisingpublicdeficitsanddecliningGDPgrowth,we compareFrancetotwodevelopedcountrieswithstronggrowthandeffectivepublicspending management:GermanyandJapan.Between2000and2023,Germanymaintainedanaverage publicdeficitof 2,0% ofGDP(IMF),withanaveragegrowthof 1,8% peryear(WorldBank). Japan,withanaveragedeficitof 5,5%,achieved 1,0% averagegrowth.InFrance,theaverage deficitwas 4,5%,with 1,4% growth.Inallthreecountries,anincreaseinthepublicdeficitis associatedwithadecreaseinGDPgrowthmorethantwice(e.g.,France2009:deficit 7,5%, growth 2,9%;Germany2009:deficit 3,0%,growth 5,6%;Japan2020:deficit 9,2%,growth 4,5%).Thisrecurrencesuggestsasystematiclink.Bycalculatinganoptimaldeficit-togrowthratio(publicdeficitdividedbyaveragegrowthduringpositivegrowthperiods),Germany showsaratioofapproximately 1,1 (deficit 2,0% for 1,8% growth),andJapan 5,5 (deficit 5,5% for 1,0%).France,witharatioof 3,2 (deficit 4,5% for 1,4%),appearslessefficient.Anoptimal ratiocloseto 1,0 to 2,0,asseeninGermany,suggeststhatamoderatedeficitsupportsgrowth withouthinderingit,unlikethehigherdeficitsobservedinFrance(aswewilldiscussinSection 2).
Table3: EvolutionofNominalGDPandGrowthin%(1945–2024) YearGDPGrowth(%)NominalGDP(billion)
,
,
Table4: *
Comment:From1945to2024,growthrangesfrom 3,5% to 1,1%,andnominalGDPfrom 10,2 to 2874,6 billioneuros.Themaximumgrowthis 6,8% (2021),theminimum 7,8% (2020).
2EvolutionofGDPNetofPublicDeficit
2.1DataAnalysis
TheGDPnetofthepublicdeficitshowshowthedeficitimpactsperceivedgrowth. Table 5 presentsthedifferencebetweenGDPgrowth(inpercentage)andthepublicdeficit(asa percentageofGDP),asdiscussedinSection 1.In2020,thedifferencewasnegative( 16,8%) duetoamassive 9,0% deficittosupporttheeconomyduringtheCOVID-19crisis.In2023,with 0,9% growthanda 5,5% deficit,thedifferenceis 6,4%,indicatingthatthedeficitexceeds growth,raisingconcernsaboutthesustainabilityofspendingpatterns.Whenthepublicdeficit islow,GDPgrowthisstronger(e.g.,1970sand2000s).Conversely,ahigherdeficithinders GDPgrowth.Forexample,between1970and1977,thedeficitincreasedfrom 0,8% to 3,0%, andgrowthfellfrom 5,7% to 2,2%.Thesamepatternisobservedbetween2000and2023, withthedeficitrisingfrom 1,5% to 9,0% in2020,then 5,5% in2023.
Table5:
EvolutionofGDPNetofPublicDeficit(1945–2024)
YearGDPGrowth(%)PublicDeficit(%ofGDP)GDP-Deficit(%)
Table6: *
Comment:From1945to2024,GDP-Deficitrangesfrom 1,5% to 5,0%.Themaximumis 5,7% (1960),theminimum 16,8% (2020).
2.2CorrelationAnalysis
ToquantifytherelationshipbetweenincreasingpublicdeficitsanddecliningGDPgrowth, acorrelationanalysiswasconductedonthedatafrom Table 5.ThePearsoncorrelation coefficientbetweenGDPgrowth(%)andpublicdeficit(%ofGDP)iscalculatedasfollows:
Table7: SummaryofCriticalPeriodsforGDPNetofDeficit(1945–2024) YearGDP-Deficit(%)Context
1960 5,7
1980 0,7
2009 7,7
2020 16,8
2023 6,4
Stronggrowth(TrenteGlorieuses)
Oilshockandslowdown
Globalfinancialcrisis
COVID-19crisis
Post-COVIDslowdown
Table8: *
Comment:From1960to2023,GDP-Deficitrangesfrom 5,7% to 6,4%.Themaximumis 5,7% (1960),theminimum 16,8% (2020).
where xi isGDPgrowth, yi isthepublicdeficit(%ofGDP),and x, y aretheirrespective means.Overtheperiod19452024,thecorrelationcoefficientisapproximately 0,68,indicating amoderatetostrongnegativecorrelation.Thismeansthatasthepublicdeficitincreases(asa percentageofGDP),GDPgrowthtendstodecrease,confirmingqualitativeobservations.For example,in2020,ahighdeficitof 9,0% coincidedwithanegativegrowthof 7,8%.This correlation,reinforcedbytheinternationalcomparison(asdiscussedinSection 1),suggests thathighdeficitscanhindereconomicgrowth,possiblyduetomisallocationofresourcesor increasedpressureonpublicfinances,aswewilldiscussinSection 3.Detailedcalculationsare providedinAppendix A
3EvolutionofGDPNetofPublicSpending
Publicspendingaccountsforapproximately 57% ofGDPinFranceinrecentyears,reducingthe netGDPavailablefortheprivatesector. Table 9 comparesnominalGDPtopublicspending, highlightingthegapbetweenthesetwoindicators,asdiscussedinSection 1.From2008to 2023,thedifferencevaried,butthespending-to-GDPratioincreased,indicatinggreaterstate intervention.In2023,withaGDPof 2811,2 billioneurosandestimatedspendingof 1610,0 billioneuros,thenetis 1201,2 billioneuros.
Table9: EvolutionofGDPNetofPublicSpending(1945–2024)
YearNominalGDP(billion)PublicSpending(billion)GDP-PublicSpending(billion)
,
,
Table10: *
Comment:From1945to2024,GDP-PublicSpendingrangesfrom 6,1 to 1149,8 billion euros.Themaximumis 1201,2 billioneuros(2023),theminimum 6,1 billioneuros(1945).
4Synthesis
TheevolutionofFrenchGDPsince1945showssustainedbutslowinggrowth,withnominal valuesincreasingover280-foldfrom 10,2 billioneurosto 2874,6 billioneurosin2024,asdiscussed inSection 1.Thepublicdeficitandpublicspendinghaverisenproportionally,reducingthe relevanceofgrossGDPasanindicatorofprivatewealth(asdiscussedinSection 2 andaswe willdiscussinSection 3).Thetablesillustrateapost-2008slowdown(0,9% in2023)anda growingimpactofpublicfinances,withanegativecorrelationbetweenpublicdeficitandGDP growth( 0,68,Section 2).The"BalanceofPublicSpendingandGrowthRelationship"model, basedonthiscorrelationandcomparisonswithGermanyandJapan(Section 1),positsthata moderatepublicdeficit(deficit-to-growthratioof 1,0 to 2,0)supportsgrowthwithouthindering it,unlikethehigherdeficitsobservedinFrance(ratio 3,2).Thesetrendsquestiontherelevance ofGDPasasoleindicatorofeconomichealth,aswewilldiscussinSection 5.
5ConclusionontheRelevanceoftheGDPIndicator
GDPisrelevantformeasuringoverallproductionbutlesssofornetwealthorwell-being,as itdoesnotaccountfordeficits,publicspending,orenvironmentalexternalities.Itremains essentialbutshouldbecomplementedbyindicatorslikeadjustednetGDPortheHumanDevelopmentIndex(HDI).Wehaveobservedtherelationshipbetweenrisingdeficitsanddeclining growthpotential(asdiscussedinSection 2).The"BalanceofPublicSpendingandGrowthRelationship"model(Section 4)showsthatamoderatepublicdeficit,closetotheoptimalratioof 1,0 to 2,0 observedinGermany,supportsgrowthwhileavoidingresourcemisallocation.Thus, theprincipleofabalancedbudget,oralowdeficit,helpsmaintainmarketalignment,preventing wealthproductiondestruction.
Limitations
Dataarelimitedto1960fordetailednominalvalues,withestimatesforearlierperiodsbasedon growthrates.Publicspendingisestimatedusingratios(e.g., 40% in1945, 60% in2024)due totheabsenceofcompletenominalseriessince1945.The2024dataincludeprojectionsbased ontheOECDandIMF.Thecorrelationanalysis(Section 2)andinternationalcomparison (Section 1)relyonaggregateddata,whichmaymasksectoralvariations.Additionally,wedo notaddresswealthcreationlinkedtopublicspendingorthecomparativeefficiencyofdifferent typesofpublicexpenditure.
Sources
• INSEE,NationalAccounts, https://www.insee.fr/en/statistiques
• BanquedeFrance,PublicDeficitStatistics, https://www.banque-france.fr/en/statistics
• OECD,EconomicProjections, https://www.oecd.org
• IMF,WorldEconomicOutlook, https://www.imf.org
• WorldBank,NominalGDPData, https://data.worldbank.org
