British Chancellor of the Exchequer admitted in late November that the United Kingdom had been overtaken by France as a top 5 world economy. France has been powered by the election of former investment banker Emmanuel Macron to President. Macron has made a commitment to significant labour reforms in France in order to promote growth.
France is the second-largest economy in the Eurozone, behind Germany. With Britain poised to officially exit the European Union in 2019, both countries have been under pressure to carry the bloc forward. French statistics agency INSEE released a survey on November 23 showing business confidence rising to its highest level since January 2008. The jobs market has also seen its best numbers since 2011.
The French economy has reported fourth quarter consecutive growth of 0.5% year over year between July and September. Household consumption and investment has been strong. Banking giant Citigroup Inc. and others have announced plans for expansion into France in response to the improved investment environment ushered in by Macron.
Investors who want to take advantage of the French resurgence should look into the iShares MSCI France ETF (NYSE:EWQ). The ETF has climbed 27.7% in 2017 and 36% year over year. Some of its top holdings include Sanofi SA, BNP Paribas, and Airbus SE.
Global growth has picked up in 2017 and the Eurozone has been a big beneficiary. Macron has produced impressive results early in his presidency, and will look to build on progress made in 2018.