France’s trade deficit in goods increased to €6.4 billion in February, up from €5.8 billion in January, surpassing analyst expectations of €5.4 billion, according to Banque de France.
The rise in the deficit was driven by a drop in exports, particularly in transport equipment and agricultural products, as well as a decline in electrical, mechanical, and computer equipment exports.
Imports into France grew by 2.4% to €57.5 billion in February, largely driven by a surge in communication and publishing product purchases, which rose by 13.8%. Natural hydrocarbons imports also increased by 5.2%, while imports from the Middle East rose 15.7%. Imports from the EU and Asia also saw growth, with the former increasing by 5.6% and the latter by 1.1%.
On the export side, France saw stable overall exports at €49.7 billion in February, the same as in January. Exports of forestry, agricultural, and fishing products rose 8.7%, and natural hydrocarbons exports grew by 3.1%. However, transport equipment exports dropped by 4.9%, and refined petroleum product exports decreased by 2.2%. Exports to the EU fell by 1.4%, and exports to the Middle East declined by 7.3%. Meanwhile, exports to Asia, America, and Africa all posted increases, rising by 4.4%, 8%, and 3.3%, respectively.
While the deficit in trade in goods widened, France’s trade in services saw a slight improvement, with the surplus rising to €4.1 billion in February, up from €4 billion in January. However, the seasonally adjusted current account deficit widened to €1.9 billion, compared to a downwardly revised €1.3 billion deficit in January, marking the largest current account deficit since April of the previous year.
Despite this, France remains focused on reducing its fiscal deficit. The country aims to bring it down to 5% of GDP by the end of this year and below the EU’s 3% limit by 2029. The French government has introduced measures, such as spending cuts and tax increases, to address the fiscal deficit. However, France has also announced it will refrain from further spending cuts to protect the economy in the event of a trade war caused by the US tariffs on the EU.
