French official current account deficit jumps in August

12th October 2010, Comments 0 comments

The French current balance of payments, a key measure of payments into and out of a country, showed an increased deficit of 4.0 billion euros (5.5 billion dollars) in August, official data showed on Tuesday.

This was nearly double a deficit of 2.1 billion euros in July.

In the 12 months to the end of August, the balance showed a cumulative deficit of 36.6 billion euros, on an unadjusted basis.

The data for August, from the Bank of France, was provided on an adjusted basis. The figure for July was reduced slightly on revision.

Economists have commented for some time that France has switched into structural deficits on its balance of payments on current account, and on its trade balance.

The balance of payments is considered an important indicator because it captures all current payments in and out across the national frontiers, giving a broad picture of the ability of a country in the long term to fund its current payments abroad.

The balance of payments on capital account complements the current flows by capturing transfers of transfers of capital.

Controversy has risen in recent months because the other leading economy in the eurozone, Germany, has a strong and increasing surplus on payments for trade, one of the main components of the current account.

© 2010 AFP

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