Oil imports put pressure on French trade deficit

10th August 2006, Comments 0 comments

PARIS, Aug 10, 2006 (AFP) - France's trade deficit widened again in June and during the entire first half of 2006 owing to a rise in crude oil imports, official data showed on Thursday

PARIS, Aug 10, 2006 (AFP) - France's trade deficit widened again in June and during the entire first half of 2006 owing to a rise in crude oil imports, official data showed on Thursday

But the government expressed optimism.

The trade deficit fell to EUR 2.579 trillion in June from 1.681 trillion in May, according to revised figures released by the customs department. Analysts had expected the deficit to remain stable in June at EUR 1.8 trillion.

Exports rose 11.5 percent in the year to June, while imports increased 11.3 percent. In June French exports were worth EUR 32.9 trillion and its imports 35.5 trillion.

The most dynamic area, both for imports and exports, was the industrial sector. In addition to delivering two dozen Airbus planes in June, France sold a ship to Panama for EUR 420 million and two satellites — to Kazakhstan and the United States — for more than 200 million. It bought two Boeing aircraft and a satellite.

But a rise in energy imports due to strong domestic demand weighed heavily on the trade balance, due to the high price of oil. The bill for imports of crude — most of it from Iran — rose by EUR 400 million in June to EUR 4.2 trillion.

Junior Trade Minister Christine Lagarde insisted on RTL radio: "The trade deficit is narrowing". She said France was refocusing exports on "high-growth areas" and its foreign trade had been "distinctly better" in the first half of 2006 than in the first six months of 2005.

Nicolas Bouzou, economist with forecaster Asteres, said the latest trade figures were an indication of France's "lack of dynamism and dependence on the economic recovery in Germany and the euro zone".

He stressed that the difficulties facing the French vehicle manufacturing sector had become "structural".

Copyright AFP

Subject: French news

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