France’s trade balance improves despite an unfavourable international environment

France's trade balance for goods improved for the first time since 2015, with a deficit of €58.9 billion, after €62.8 billion in 2018, thanks to an increase in exports (up 3.3% to €508 billion) that was more marked than for imports (up 2.2% to €566.9 billion). France's trade balance improved by comparison with all the world’s major regions except Asia.

The non-energy goods trade deficit fell from €32 billion in 2018 to €29.1 billion in 2019, thanks in particular to good performance in exports of pharmaceutical products (up 10.4% to €33.6 billion), textile products and clothing (up 8.5% to €28.5 billion), and agricultural and agrifood products (up 3.2% to €64.4 billion). Exports in the aerospace sector increased for the second year running (up 11.9% to €64.2 billion) thanks to a new record year for Airbus (863 deliveries, including 358 from France). The luxury industries also continued to support our foreign trade, with a 9% increase in exports to €55.9 billion.

The energy bill fell slightly in 2019 (down €0.8 billion) but continued to have a strong impact on our trade balance, accounting for some 60% of the total goods deficit. This stabilization, which is linked to the fall in the oil price in 2019 (Brent down 9.4% a barrel), follows two years of marked increases (up 24% in 2017 and 16% in 2018).

Non-energy imports continued to grow at the same pace as in 2018 (up 3.2%), in particular due to the dynamism of the French economy. Significant rises in imports can also be seen in the aerospace (up 10.2% to €33.2 billion), industrial and agricultural machinery (up 4.7% to €47.6 billion) and motor-vehicle (up 4.8% to €47.3 billion) sectors.

Our trade in services was still broadly in surplus, with a balance of €21.8 billion in 2019, although this was in decline (after €23.8 billion in 2018). In particular, while tourism revenues continued to increase for the third consecutive year (up 4.4% to €57.9 billion), the even more marked increase in French people’s spending abroad (up 11.5% to €45.2 billion) led to a reduction in our tourism surplus.

As for the current balance – a measure of France’s need for foreign finance –, it remained relatively stable and comparable to that of 2018, down 0.8% of GDP in 2019, according to the latest estimates from the Banque de France.

France’s foreign trade thus showed good resilience in an unfavourable international environment marked by high trade tensions, a rise in protectionism and lacklustre global trade. This resilience is remarkable by comparison with other European countries. According to the trends observed in the first three quarters of 2019, the growth in French goods exports in 2019 was greater than that in German, British, Italian, Dutch and Spanish exports. France’s market share in global trade has stabilized since 2012, at 3.1% in goods and 3.5% in goods and services, keeping France in fifth place in the world in terms of exports of goods and services.

Compared to that of its rivals, France’s competitiveness has shown positive momentum, as testified by the change in cost-competitiveness indicators compared to the other OECD countries, indicating an increase of nearly 7% compared to the end of 2013, with the pace speeding up recently.

"These 2019 figures are very encouraging for our economic policy and our strategy of support for foreign trade. Despite trade tensions and the rise of protectionism, our trade deficit has fallen by €3.9 billion, our goods exports have increased by €16 billion and France hasn’t had so many exporters for 17 years."

is pleased to say Minister of State Jean-Baptiste Lemoyne. 

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Source: France Diplomatie