This Survey is published on the responsibility of the Economic and Development Review Committee of the OECD, which is charged with the examination of the economic situation of member countries.The economic situation and policies of France were reviewed by the Committee on 4 October 2021. The draft report was then revised in the light of the discussions and given final approval as the agreed report of the whole Committee on 28 October 2021.The Secretariat’s draft report was prepared for the Committee by Antoine Goujard and Priscilla Fialho with the participation of Chiara Loriaux under the supervision of Pierre Beynet. Statistical research assistance was provided by Paula Adamczyk, and editorial assistance by Jean-Rémi Bertrand. The previous Survey of France was issued in April 2019.Information about the latest as well as previous Surveys and more information about how Surveys are prepared is available at http://www.oecd.org/eco/surveys.

Economic policies reacted swiftly and strongly to the crisis, and activity has rebounded quickly. The recession associated with the pandemic was severe. From March 2020 to end-June 2021, sanitary restrictions tightly constrained economic activity, although their impact gradually declined, leading to a steep rebound (Figure 1).

The French economy has bounced back following an unprecedented contraction during the COVID-19 pandemic. The fall in activity in 2020 was the sharpest since the end of the Second World War. As in other OECD countries, successive waves of COVID-19 cases reduced life expectancy by around half a year in 2020 (close to the OECD average; Figure 1.1). Economic activity and employment have bounced back swiftly since May 2021. Yet, the recovery remains conditional on the full normalisation of the health situation and an effective shift to more inclusive and sustainable growth once the remaining health restrictions are lifted.

The green transition has become one of France’s main priorities. Even though it is one of the countries with the lowest greenhouse gas emissions, the pace of emissions cuts has to accelerate to comply with its European commitments, namely carbon neutrality by 2050. Land take continues to increase and waste volumes remain above the OECD average. Intensive farming and the use of chemical inputs have had a highly detrimental impact on biodiversity and ecosystems.Green private investments must increase, and households and businesses need further incentives to adapt their behaviour. Public acceptance for environmental taxes is low. They are nevertheless effective in reducing emissions and pollution. To avoid exacerbating inequalities and to promote social acceptance for environmental taxes, the most vulnerable households and businesses need additional support.The design and implementation of some policy instruments can still be improved to increase their cost-effectiveness in reducing emissions and pollution. The development of renewable energies must accelerate to diversify the energy mix without jeopardising efforts towards a more sustainable economy, nor affecting electricity supply security and affordability. Land-use policies must also take better into account the many benefits of biodiversity and internalise the negative externalities of land take.