French trade deficit figures better than expected

11th April 2006, Comments 0 comments

PARIS, April 11, 2006 (AFP) - The French trade balance showed a sharply reduced deficit in February, official data showed on Tuesday.

PARIS, April 11, 2006 (AFP) - The French trade balance showed a sharply reduced deficit in February, official data showed on Tuesday.

But one analyst commented that the figures did not change an underlying trend towards a deepening imbalance, saying that France now had a structural trade deficit.

The adjusted data, from the customs service, showed a deficit of EUR 2.015 billion after a deficit of EUR 2.414 billion in January.

The figure was better than economists had expected since they had forecast broadly a deficit of EUR 2.3 billion.

The customs service also revised upwards slightly the deficit for January to 2.367 billion euros.

The customs service said that the data, which showed a slight fall in exports and imports, did not change a trend towards increased overall trade.

But at Natexis Banques Populaires, economist Marc Touati commented: "The evidence is clear: we are in the course of being satisfied with a French trade deficit which has become structural."

He said that the deficit would remain high if French exports remained weakly specialised by sector and by region of the world. In addition, the recent rise of the euro would weaken the competitive position of exports and increase the appetite for imported goods.

He said: "In this context, the French external deficit, having reached EUR 22.2 billion in 2005, is likely again to come close to EUR 20 billion this year, and also next year."

The customs service said that exports in February had fallen slightly to EUR 31.574 billion from EUR 31.735 billion in January, having risen strongly in the preceding three months.

Exports to the rest of the European Union, and particularly to Italy, remained strong, but exports to other countries, except in the Middle East, had fallen because fewer aircraft had been delivered.

Copyright AFP

Subject: French news

0 Comments To This Article