The prosperous French economy has probably entered a phase of slow deterioration.
Last weekend's devaluation of the franc and imposition of a wage and price freeze are signs of the malaise.
That view, shared by several economists interviewed here, may sound awful. But it is nowhere near the gloom and doom foreseen by many conservatives when Francois Mitterrand, a lifelong socialist, defeated Valery Gicard d'Estaing in the presidential elections in May of 1981. Many citizens danced in the street, joyous over the end of 23 years of right-wing Gaullist or conservative center rule. But the mood in the financial community was grim. The Bourse (stock exchange) collapsed, the franc was sold heavily, and French savers rushed into gold.
During those presidential elections and the subsequent parliamentary elections, recalls Pascal Salin, a University of Paris economics professor, the Socialist Party and its Communist Party ally promised so much that it seemed impossible for them to finance their program without creating an enormous amount of new money. ''They were more cautious in this regard than I thought,'' Mr. Salin said.
As a result, inflation in France has not taken off as quickly as anticipated by him and others.
One reason may be the relative moderation of Finance Minister Jacques Delors. ''We have a fairly restrictive monetary policy,'' he noted in an interview last month. ''I am not a monetary fanatic. But I do believe you have to keep money in bounds, so we do not have a permissive climate for inflation.''
The Bank of France, which is subordinate to the Finance Ministry, has a money growth target this year of 12.5 to 13.5 percent. The money supply has actually been growing slightly above that. Inflation has stepped up from around a 12 percent rate a year ago to about 14 percent lately.
''Our main problem is inflation,'' Mr. Delors said. ''It is a peculiar French sickness. Raymond Barre (Mr. Giscard d'Estaing's prime minister) had five , six years of devotion to fighting inflation and didn't succeed in doing any better than we have. We have to be humble when we look at inflation.''
One of the French Socialist government's chief goals was to stimulate economic growth. ''We have tried to use the margins for maneuver left in the French economy for cutting unemployment, for achieving solidarity, and for relaunching the French economy,'' the finance minister said. ''The room for maneuver was limited, because we wanted to remain inside the free economic world , to respect our commitments to the international community. France is to remain an open country.''
To a limited degree, the government has succeeded. Huge increases in government spending have pumped up economic activity. The government predicts a 2.5 percent growth in national output this year; some other economists doubt it will be that much.
The trouble is that this growth is not sufficient to provide jobs for all of the new entrants in a rapidly growing labor force. France's baby boom generation is entering the labor market now, some years later than in the United States. So unemployment has grown slightly, to just about 2 million. The Socialists had aimed at trimming the number of jobless.
Another difficulty is that French economic policy is out of step with its trading partners. ''We jumped out of the trenches with no artillery support,'' said Yves Laulan, a prominent French economist.
Whereas inflation and growth prevail in the French economy, deflation is the pattern in such key trading partners as West Germany, Britain, Belgium, and the United States.
''We practice in general a progressive policy which is unlike the brutal policies followed by other governments,'' said Mr. Delors. ''Unemployment is not going up in France as it has in some other countries of the world.''
As he admits, however, this out-of-step policy ''makes it difficult for us.''
For one thing, France's balance of payments has deteriorated because of its relatively high inflation rate and more rapid growth.
Already in May many believed the French franc, which was devalued last October, would tumble again soon within the European Monetary System. Monetary reserves were down from more than 40 billion francs in May of last year to barely 16 billion by late last month.
The devaluation of about 10 percent in relation to the German mark is intended to remedy this international payments problem. But its immediate effect will be to boost the cost of imports, and thus inflation.
Another problem is the burgeoning deficit in the national budget. In its idealistic effort to help lower-income people and get the economy moving faster, the government boosted old-age pensions 20 percent, raised government housing subsidies 25 percent, and similarly increased maternity, family, and other government benefits. It created 120,000 new government and public-sector jobs, and enacted programs to stimulate fresh investment by large and medium-size companies. Health expenditures rose 21 percent.
France, according to a study by the Organization for Economic Cooperation and Development, has a relatively poor distribution of income pattern for an industrial country, with the rich getting an extra large share of national income. The Socialists openly pledged a redistribution of income - and have succeeded to some extent.
But the outcome of all this government spending will be a deficit of at least 110 billion francs, or about $18 billion, this year, according to government economists. Armand Lepas, an economist with the Conseil National du Patronat Francais (CNPF), the representative organization for French business, says the deficit will more likely be 120 to 125 billion this year and could reach 180 billion in 1983.
The official figure is equivalent to about 3 percent of gross national product, that is, of the nation's total output of goods and services. It is about the same proportion of GNP as the deficit in the United States. An economic adviser to Lionel Jospin, the Socialist Party's first secretary, notes that France has by comparison with other industrial countries nearly the smallest amount of relative total public debt outstanding. ''The government of M. Barre had a very prudent and strict public-debt policy,'' noted Jean-Michel Charpin, the adviser. ''But even after the deficits of 1981-82-83, all these aggregates will remain very sensible.''
In other words, the conservative administration of Raymond Barre left France in good fiscal shape.
Even Mr. Charpin, however, is bothered by the prospects of an enlarged deficit in the French social security system, which covers health, pensions, unemployment benefits, and family allowances. The French government's official statistics bureau, INSEE, has forecast the deficit could rise from 40 billion francs ($6.7 billion) in 1981 to 66 billion to 120 billion at constant 1981 prices by 1986. The system is financed mainly from employer and employee contributions. The difficulty for the Socialist government will be financing the enlarged deficit, including that of the social security system. Jerome Vignon, a Finance Ministry economist, figured the Bank of France might cover about 45 percent of the deficit through the creation of new money, with the remaining 55 percent raised on the financial markets.
Finance Minister Delors said last month the extra pump-priming via government spending ''can't continue indefinitely.'' During the weekend, the government announced there would be austerity measures, but did not announce details. The government is still divided on the issue.
Economist Laulan asserts the government has ''fired its last shots'' and now the nation must pay ''great costs'' in terms of ''atrocious'' higher prices and balance-of-payments deficits. ''We will have to deflate,'' he says. ''We will have to accept much lower growth rates.''
Professor Salin maintains that the financing of the deficit and of the purchase of nationalized banks and industrial companies will be ''impossible'' without an acceleration in the creation of money, and thus more inflation. ''The effect on private investment will be unbearable,'' he says. Before the wage and price freeze, CNPF economist Lepas talked of 15 to 18 percent inflation by 1983. The government now hopes to hold inflation to 8.5 percent next year .
Another danger to the Socialist government is a petering out of the recovery. Some economists believe that a fiscal shove to the economy will lose its effect if higher inflation eats up any extra dose of money. Mr. Salin, for instance, figures the real rate of growth in GNP will be ''closer to 0 than 3 percent.'' Government economists are themselves anxious about the possibility of the economy's losing its momentum.
Faced with all these economic difficulties, the Socialist government will work in several directions, Mr. Delors explained. Among these are:
* Because business profits are low, discouraging investment, it will ''limit the costs of doing business for the next two years.'' In other words, no new business taxes will be added to those already imposed by the Socialist government. Last month the government eased taxes on private industry by some $1 .8 billion over two years, but altered the value-added taxes to raise somewhat more than that.
* The government will impose ''a reasonable incomes policy.'' That was announced on the weekend. Socialist Party adviser Charpin spoke of an effort to limit current-franc incomes, yet not lower real wages.
He acknowledged that such income policies have failed more often than they have succeeded in other countries. ''But this government has more than previous governments the confidence of the trade unions,'' he said. He held that even the Communist-led CGT union is ''much more responsible than most people think and than it appears in their public statements.''
France's Socialist economists are aware of the dangers of their policies. They recall the economic mess their party left behind when in power in 1936, and its political damage. ''There are some risks, we know,'' said Mr. Charpin. He pointed to the wide difference in economic approaches between that of Socialist France and the conservative governments of the United Kingdom and the United States.
''Who,'' he asked, ''will make the best of it? A lot of things are at stake both internally and internationally.''