FRANCE - BALANCE OF PAYMENTS 2017 yearly press report

Balance of Payments Yearly Press Report reference year 2017 « A slight improvement in the current account, Competitiveness still calls for attention » French balance of payments and international investment position – April 2018

Key components of the Current Account Billion euros Primary income results from a production process: it includes compensations of employees (wages) and invested capital (investment income), rents, taxes and subsidies. Secondary income, or transfers, deals with a distribution process not linked with a production process (compensations of employees and subsidies not linked with production, social contributions and benefits, personal transfers, insurance claims, etc.). Source: Banque de France - DGS French balance of payments and international investment position – April 2018

Key components of the Current Account Billion euros Source: Banque de France - DGS French balance of payments and international investment position – April 2018

International Trade in Goods and Services balances - comparison with our main European partners - % of GDP Source: Banque de France - DGS, Eurostat French balance of payments and international investment position – April 2018

Net trade in goods deteriorates, net trade in services improves % of GDP Improvement: +0.4 GDP point (+8.7 billion €) Decline: -0.3 GDP point (-6.5 billion €) Source: Banque de France - DGS French balance of payments and international investment position – April 2018

Services balance: a rise in tourism and an upturn in transport services Billion euros The main contributors to the balance upturn: tourism and travels* technical, trade-related and other business services (especially consultancy services) transport (in particular sea transport) * The statistical revision of tourism explians only 1 billion in the total increase (11 billion in 2016 and 12 in 2017). Source: Banque de France - DGS French balance of payments and international investment position – April 2018

Breakdown of net current account – Euro Area (EA), excl EA and vis-à-vis all partner countries - Balance of transactions in goods and services, billions euros, (cumulated over on 2013-2017, provenance) Source: Eurostat, Banque de France - DGS French balance of payments and international investment position – April 2018

(cumulated over 2013-2017, provenance) International Trade in Services, comparison France, Italy, Spain, Germany Balance of transactions with the other members of the euro area, billions euros (cumulated over 2013-2017, provenance) Trade in goods Trade in services Source: Eurostat, Banque de France - DGS French balance of payments and international investment position – April 2018

Households, firms and public administrations savings and current account balance (2016 data, % of GDP) Source: INSEE, Eurostat, Banque de France - DGS French balance of payments and international investment position – April 2018

Growth differentials between French and German exportations (export volumes, AAGR, variations in %) Source: Banque de France - DGEI French balance of payments and international investment position – April 2018

(export volumes, AAGR, variations in %) Growth diffentials between French and Italian exports and French and Spanish exports (export volumes, AAGR, variations in %) France - Italy France - Spain Source: Banque de France - DGEI French balance of payments and international investment position – April 2018

Labour cost ratios - Germany / France (1999 = 100) Wages Total labour cost ( = wages + social contributions and other taxes) Source: Eurostat - Sector: Business Economy (NACE: B-N). French balance of payments and international investment position – April 2018

France’s losses in market shares do not stem from sectoral specialisation between 2000 and 2016 Export growth (USD, average annual growth rate (AAGR) 2000-2016)= specialisation-adjusted performance + sectoral specialisation effect (world demand for the exported products) + geographical specialisation (client countries demand) Shift-share analysis based on the BACI-CEPII 2000-2016 database French balance of payments and international investment position – April 2018

Export positioning – France and Germany High-end share = 40% Germany 2016: High-end share = 50% Low-end middle-market High-end low end middle-market High-end Source: CEPII country profiles French balance of payments and international investment position – April 2018

Technological innovation content Perceived ranking of France compared to its euro area partners, according to 2 criteria Value for money Technological innovation content (*) Ranking based on interviews of 500 purchasing managers in the main European countries. Reading: as for intermediate goods value for money, France is ranked 7th whereas Germany is 2nd (-5), Spain 4th (-3) and Italy 5th (-2). Source: COE REXECODE « Competitiveness in 2017 » - Ranking based on European purchasing managers’ reports. French balance of payments and international investment position – April 2018

French exporting SMEs, compared Number of exporting firms Exports (billions of euros) Source: Eurostat, Banque de France – DGS – 2015 data French balance of payments and international investment position – April 2018

Balance, billions of euros Net primary income steming from international investment position remains largely positive Balance, billions of euros Income from Foreign Direct Investment, compensation from employees working abroad are the main sources of the global net primary income. Source: Banque de France - DGS French balance of payments and international investment position – April 2018

Inward and outward direct investments 2017, billions euros Source: Banque de France - DGS French balance of payments and international investment position – April 2018

International investment position: -461 billion of euros end 2017 (-20 International investment position: -461 billion of euros end 2017 (-20.1% of French GDP) % of GDP Source: Eurostat, Banque de France - DGS French balance of payments and international investment position – April 2018