The Latest: French Finance Minister Bruno Le Maire and his US counterpart Treasury Secretary Steven Mnuchin confirmed on January 23 that France will suspend the collection of its digital services tax until 2020 whilst the US will refrain from imposing punitive tariffs on French goods over the tax for the same period.

Implications: The announcement

Key View:

• We hold a positive outlook on the construction of France’s EUR35bn Grand Paris Express metro rail project, the largest infrastructure development currently underway in Europe.
• With strong backing from the French government, involvement of experienced European construction and engineering firms and a strong business case, we believe

Key View

• We expect the economic fallout of the 'Yellow Vests' protests in France to be temporary.
• Although the protests likely dented activity in the final quarter of 2018, informing our downward full year real GDP growth revision from 1.9% to 1.6%, a rebound amid Macron’s fiscal concessions appears likely.
• We therefore forecast growth in 2019

Key View

• The government's latest action plan for the life sciences sector will consolidate efforts to boost the attractiveness of France as a global centre for health innovation and excellence
• The medical device industry will benefit from measures to speed up patient access to technological innovations and support research and development.
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Key View:

• We forecast installed solar power capacity in France to more than triple between 2017 and 2027.
• Strong government support registered for the sector, ambitious long-term nuclear phase-down plans, and limited scope for conventional thermal power capacity expansion all support out positive outlook for solar power in France.

Forecast

French departments' budgetary performance improved in 2017, despite additional cuts in state transfers. This was due in particular to growth in property transfer duties and a near-stabilisation in social benefits spending.

The improvement shows the departments' dependence on external factors, particularly the real estate and employment markets