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Economy in Brief

French Trade Deficit Widens
by Robert Brusca April 11, 2007

France’s trade deficit widened in February as imports outpaced exports. Import growth continues to look more vibrant than export growth as the trends are accelerating more uniformly across trade categories.

Over the recent three months imports are growing at a pace of 7.5% nearly the same as the Yr/Yr pace. For exports the overall pace for three month is barely positive and well under the Yr/Yr growth rate of 5%. For the rest of imports growth rates are quite solid. For capital goods the pace of acceleration is quite clear with blow-off type growth over the last three months. That pace is sure to cool from the near 40% it currently posts. Motor vehicle imports are strong, running at a super strong 28% pace and 14% Yr/Yr. Other consumer goods however show weakness: imports at -6.4% for three months and they are steadily decelerating.

This is the mixed picture for France. Export growth is cooling. Imports are strong and seem to point to strong domestic demand. But consumer goods imports (non-auto) are very weak and do not signal that same type of domestic demand strength form the consumer. For the moment France is a bit enigmatic.

After seeing export and import trends wither steadily throughout 2006 and early 2007 both exports and imports have sprung to life in February of 2007.

French Trade Trends for Goods
  M/M% % SAAR
  Feb-07 Jan-07 3M 6M 12M
Balance* -€€ 2,702.00 -€€ 2,612.00 -€€ 2,565.67 -€€ 2,185.83 -€€ 2,245.17
All Exports 2.8% -1.4% 0.2% 4.0% 5.1%
Capital Goods 1.3% 1.3% -1.1% 18.9% 1.8%
Motor Vehicles 4.8% 0.7% 2.8% -1.8% 4.7%
Consumer Goods 0.5% -4.3% -6.2% 2.6% 3.6%
All Imports 3.2% -1.2% 7.5% 2.6% 7.6%
Capital goods 6.4% 2.6% 39.1% 10.8% 9.0%
Motor Vehicles 3.0% 0.8% 28.2% 16.8% 14.0%
Consumer goods 2.0% -1.9% -6.4% 0.5% 6.2%
*Bil. Euros; mo or period average
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