Paris (awp / afp) – A weak link in the French economy for years, the trade deficit widened like never before in November, weighed down by the high cost of imports of raw materials and energy.
Nine billion euros is “the lowest monthly balance ever reached,” Customs indicated in their monthly report on Friday.
Standing at 4.5 billion euros in January 2021, the trade deficit widened over the year. Figures for all of 2021 are expected in early February.
Already, the cumulative deficit in November over 12 months amounts to 77.6 billion euros, “or 2.6 billion more than the record annual deficit of 2011”, note the Customs.
“There is no great nation with an external trade balance which remains in a lasting deficit”, commented the Minister of the Economy Bruno Le Maire during a press conference in Bercy shortly after the publication of these figures.
“In 2000, France was ahead of Germany. Today, on average, France has a deficit of between 75 and 90 billion foreign trade and Germany between 200 and 250 billion in surplus”, the high commissioner for the plan François Bayrou Thursday before a committee of the Senate. “This interval, which is a defeat, cannot be reduced,” he lamented.
Part of the deterioration in the deficit in 2021 can be explained by cyclical factors. The end of the year saw an “unusual peak in electricity imports” against the backdrop of soaring prices, as well as “dynamic growth in gas and oil supplies,” Customs reported.
Added to this are the rising prices of other raw materials and industrial products. The amount of imports thus reached “the historic sum” of 52.5 billion euros in November, with a jump of 20.1% in value.
At the same time, exports are also increasing, but at a slower pace of 400 million euros on average per month since the start of the year, to settle in November at 43.5 billion euros, almost at the level from the April 2019 peak.
Supply problems in the automobile production and transport equipment sectors, which are traditionally quicker to generate “a little trade surplus”, weigh on exports, underlines Denis Ferrand, director general of the Rexecode institute.
“The Covid crisis has affected two strong links in French foreign trade, aeronautics for goods and travel for services”, reports Thomas Grjebine, from the Center for Prospective Studies and International Information (CEPII) .
“Industrial desertion”
But beyond these elements which amplify the movement, France’s trade deficit has been widening since the early 2000s.
“This catalytic effect clearly shows that the missing link in activity in France is still our weakness internationally,” underlines Denis Ferrand. While imports are progressing “in a very trendy manner, there is a relative decline in French exports, compared to what can be observed in the euro zone as a whole”.
“The most worrying thing is that we cannot turn around this trend of a slow but almost continuous deterioration in the balance of manufactured goods, and that is linked to our deindustrialization”, replies Thomas Grjebine.
At the beginning of December, the High Commission for Planning had pleaded for the return to France of the production of certain goods now imported in order to reduce the trade deficit. The HCP has thus drawn up a list of 50 products for which it wants to initiate discussions with the sectors concerned.
On Friday, the Minister of the Economy Bruno Le Maire said he wanted during the next five-year term to continue lowering production taxes as well as charges on wages above 2.5 SMIC in order to reindustrialize France.
He blasted an “industrial desertion for 30 years” for which he made responsible successive governments, but also the captains of French industry who have relocated massively abroad.
“The weakness of our foreign trade is a reflection of the weakness of our domestic economy,” he said.
afp / rp