French trade deficit narrows in June

5th August 2011, Comments 0 comments

France reduced a big trade deficit in June, official data showed on Friday, but the balance for the first six months of the year was sharply higher than for the second half of 2010.

The deficit for June was 5.59 billion euros ($8.0 billion), down from 6.41 billion euros in May, adjusted data from the customs service showed.

France has been running a big and increasing structural trade deficit in recent years.

Analysts say that this reflects an underlying loss of competitiveness, partly because France, by comparison with Germany, has too few medium-sized companies which tend to produce mid-range goods rather than capturing niche, high-value markets.

The balance for the six months to June showed a deficit of 37.5 billion euros compared with a deficit of 27.6 billion euros in the last six months of 2010.

The six-month data reflected an increase in the bill for imported energy products such as oil and gas and a worsening of a deficit in industrial goods.

The finance ministry said that the reduction of the deficit in June reflected a big drop in imports, mainly of energy products. Exports were steady overall.

In April. the monthly deficit had risen to 6.8 billion euros and in May to 6.4 billion euros, on a revised basis.

The cumulative balance for the 12 months to June shows a deficit of nearly 65 billion euros. In the whole of 2010, the trade balance was in deficit by 52.2 billion euros.

Exports of industrial goods eased slightly in June. A rise in sales of aerospace and pharmaceutical products did not compensate fully for falls in sales of semi-finished goods, of autos and of mechanical and electrical equipment.

The trade balance is an important factor in the overall performance of an economy, since a surplus points to growth.

© 2011 AFP

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