French trade deficit widens 26.7 percent in May
Official data shows value of exports falling from 35.313 billion in April to EUR 34.719 billion in May.9 July 2008
PARIS - The French trade deficit widened 26.7 percent in May from the April figure, official data showed on Wednesday, and analysts said this highlighted chronically weak competitiveness.
Customs authorities said the shortfall came to EUR 4.738 billion in May, when the value of exports fell to EUR 34.719 billion from 35.313 billion in April.
Imports by contrast climbed to EUR 39.457 billion from 39.052 billion.
The deficit in the 12 months to May came to EUR 45.603 billion.
"The deterioration in the deficit is general both by sector and region," said analyst Marc Touati of Global Equities.
"Whether it's in capital goods, intermediate goods, automobiles, whether it's sales destined for the European Union, the United States, Africa, the Middle East or east Asia, French exports are declining almost everywhere and in all domains.
"While a world and European slowdown, as well as a strong euro, play a major role in this deterioration, these figures shed harsh light on the weak competitiveness of our exports around the world."
Touati warned that "nothing appeared likely to be able to improve the situation," notably in light of tepid European growth, a strong euro and high oil prices, and said the annual trade shortfall could hit EUR 50 billion.
At research group Xerfi, economist Alexander Law cautioned against blaming the appreciating euro, which makes eurozone exports less competitive abroad, and rising oil prices for the full scope of the deficit.
He pointed as well to France's dependence on exports to the European Union, which accounted for half of May's deficit.
"The sharp decline in the British and Spanish economies has a direct impact on France," he said. "Sales to both countries were down in May."
While exports to Germany remained "robust," they were largely confined to the aerospace sector.
For Nicholas Bouzou at the Asteres consultancy, "the most worrying signal is in the fall in capital equipment exports, which he attributed to "lower investment levels in France's principal partners," in particular Spain.
[AFP / Expatica]