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MACRO PERSPECTIVE : France and Germany: running at different speeds


Monthly macroeconomics analysis by Philippe Waechter, Chief economist of Natixis Asset Management.

"Are the dynamics of the French economy really very different from Germany? Recent history has proven that this is the case. Since the low point of the recession in 2009, Germany has effectively outpaced France in terms of performance. The German economy has expanded by 2.2% on an annualized basis, whereas business in France has grown only half as fast, by 1.1%. However, the opposite was true at the beginning of the 2000s.

The two economies are on an equal footing, over a reference period starting with the launch of the euro in Q1 1999. From this date until Q1 2014, French GDP grew 22.7%, whereas Germany increased by 21.8%.

France and Germany function according to a different logic however. They are therefore on divergent trajectories. In order to rekindle growth, France is obliged to draw on internal demand, whereas Germany can count either on domestic demand, or on its trade with the rest of the world. The difference between the two economies therefore lies in their growth drivers."

Read more in Macro Perspective

On 3 April 2018, Natixis Asset Management became Ostrum Asset Management.