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UK leapfrogs France in world wealth rankings

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UK leapfrogs France in world wealth rankings
Ouch. France overtaken by the UK as the world's 5th economic power. Photo: Oli Bac/Flickr
10:34 CET+01:00
In what will be a bitter blow to French morale and the government, reports in France on Wednesday claim the country has been overtaken by the UK as the world's fifth economic power.

Speaking to the nation on New Year’s Eve president François Hollande laid out his reasons for why the French should be optimistic about the future of their country.

“France is a great country, it is the fifth biggest economic power in the world,” Hollande told millions of viewers.

But just days later, a report by the right-leaning newspaper Le Figaro – a regular basher of the socialist government - suggests that statement is no longer be accurate.

Le Figaro claims that data on the European Commission’s website revealed France’s GDP, or the wealth created by the country, during the year was estimated at €2,134 billion.

That’s slightly less than the figure for the UK’s GDP, which was quoted as €2,232 billion meaning Great Britain has overtaken France in the global wealth league.

The figures are however only provisional, but Le Figaro claims the positions are unlikely to change once the definitive figures are published in a few weeks’ time.

The news came as a bit of a shock to France’s Economy Minister Emmanuel Macron.

“I am little surprised to be behind the UK,” he told BFMTV. “The key point is that in the Eurozone we are suffering from a lack of growth. In France we are fighting hard to restore this growth.”

If the figures are proved to be correct it would be the first time France finds itself behind the UK in the biggest economy rankings since 1973.

The reason for the swapping of places has been put down to various factors, mainly the fact the UK economy enjoyed 3 percent growth in 2014 compared to  0.5 percent in France, which according to Le Parisien newspaper reflects a difference of €40 billion in wealth created last year.

Another reason given is the higher rate of inflation in the UK (1.5 percent) compared to France (0.4 percent) which also accounts for a difference of €40 billion.

Finally the growing strength of the pound against the euro can reportedly account for €128 billion of Britain’s GDP.

Le Figaro’s report is not the first in recent weeks to claim the French economy has been leapfrogged by the UK.

In December the Centre for Economic and Business Research (CEBR) released rankings that also put France in sixth place, one behind the UK.

Although the reasons given for the switch were quite different.

Britain’s GDP has been boosted by its multi-billion pound sex and illegal drug industries, which were worth €10 billion.

France however decided not to include prostitution or narcotics income in its gross domestic product calculations.

It’s also worth noting that GDP is not the only way of calculating economic power. PPP (purchasing power parity), based on IMF estimates, is also used for determining rankings.

Christophe Blot from the French Economic Observatory in Paris, sees no reason to doubt the fact the UK has overtaken the French economy, but for him, league tables are of little importance.

“There’s no reason to contest these estimates but the figures are close and they can easily change again over time,” Blot told The Local.

“It’s not really a surprise that the UK is above France given the problems the French economy has faced, such as record unemployment and a lack of growth.

“Of course the data will be used by politicians and the French bashers and it is a blow to morale but it doesn’t really matter," Blot said.

"We are all aware of the problems in France over the last few years but the question is how can we boost growth in the French economy? That’s all that matters.”

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