French foreign trade statistics have posted record deficits this year, weighed down by the explosion in energy prices since the outbreak of the war in Ukraine.
The half-year balance reaches a maximum of 71,000 million euros of deficit after a deterioration of 13,300 million euros in June, announced the French customs on Friday, two historical records.
The crossing of the symbolic bar of the 100,000 million euros of annual deficit at the end of December seems inevitable. For twelve consecutive months, France already has a trade deficit of 121.9 billion euros. The worst annual trade deficit in history dates back only to last year, with 84.7 billion euros, while the last French surplus was recorded twenty years ago.
Appointed last month to the Foreign Trade portfolio to replace Franck Riester, the new Delegate Minister Olivier Becht acknowledged on Friday “a very significant deterioration in our trade deficit” during a conference call.
energy bill
But, he said, the energy bill “self-explanatory degradation”. Energy prices weighed on the import bill for the first half of 48,000 million euros compared to 27,000 million euros in the second half of 2021. The phenomenon is further aggravated by the current weakening of the euro against the dollar.
“The energy bill is increasing, there is not much we can do,” Maxime Darmet, an economist at Allianz Trade, reacted in an interview with AFP. “But things are not looking up on the manufactured goods side of the balance.”it continues, citing aircraft deliveries struggling to recover and market share loss in the automotive equipment sector.
“These figures show that the downward trend is still there, accelerated by the pandemic”says the economist.
Excluding energy and military equipment, the trade deficit peaked in the first six months of the year at €36 billion, close to its level in the second half of 2021 but well above levels recorded in the last ten years. .
Having become one of the government’s priorities due to heavy disruptions in global supply chains and the economic fallout from the war in Ukraine, France’s declared reindustrialization efforts are struggling to translate into trade balance figures.
“It will take at least a decade to reindustrialize”Olivier Becht said on Friday, adding that France “The Fate of Thirty Years of Deindustrialization”.
For OFCE economist Mathieu Plane, the current figures raise the question of French competitiveness without costs, “research, innovation, training, many things that don’t just go through taxes”the latter having been progressively reduced since 2012 by supply-side policy and representing global tax cuts “60 to 70 billion euros a year.”
“It would be much worse if we didn’t have these devices, but we haven’t managed to recover market share”says the economist.
A rare positive point in foreign trade statistics, the very good performance of services, which recorded a record surplus of 34,000 million euros compared to 23,000 million in the previous semester. These were driven by transportation, travel, and financial services.
Among the export sectors that smile among foreign trade statistics are the food industry and the pharmaceutical industry.
Source: Nice Matin
