Economy: French trade balance deficit and world growth slowing down
While world growth forecasts are not very optimistic for 2024, French customs reported the external trade figures of Hexagon for 2023. Focus on the economic outlook and balance sheets at the beginning of the year.
World growth forecasts for 2024 are not high. The Organisation for Economic Co-operation and Development (OECD) has just provided its estimates, namely global GDP growth of2.9% in 2024while the International Monetary Fund (IMF) is planning3.1% in 2024 and 3.2% in 2025. The cause is morose world trade, inefficient investment, monetary policies and restrictive credit conditions. In the coming months, central banks are expected to start lowering key rates. The disinflationary trend should continue. The elections held in more than 70 countries of the world this year, as well as the evolution of geopolitical tensions, will have their role to play in the global economy.
In China, the real estate sector has been slowing down growth for many months. Emerging markets, such as Indonesia and India, are expected to raise global growth this year (cf.India: Soon to be the third largest economic power in the world?). The US economy is expected to be more resilient than originally expected, and better than the euro area, which is expected to grow by 0.6% in 2024 and 1.3% in 2025. In France, growth is also expected to rise to 0.6% and in Germany, its main partner, to 0.3%.
Another economic report from the beginning of 2024, the French customs authorities published the figures of theFrance for the year 2023. Again and unsurprisingly, Hexagon imported more goods than it did exported and thus showed a trade deficit. Imports peaked at EUR 731 billion, while exports stood at EUR 607.3 billion. After reaching the sad record of EUR 162.7 billion in 2022, the trade deficit has thus returned to below EUR 100 billion (unlessEUR 99.6 billionin 2023. Just before the pandemic, in 2019, this deficit amounted to EUR 60 billion.
It was the fall in the energy bill that mainly limited the break in 2023, and to a lesser extent the break in manufactured products, as France reduced its imports of textiles and clothing, chemicals and metallurgy. The remaining sectors are aeronautics (France being one of the few countries to benefit from a complete aeronautics industry accounting for 4% of its GDP) and the luxury industry (parafums and cosmetics). On the other hand, the deficit is high in automobiles (due to the massive importation of electric vehicles, multiplied by twenty since 2017) or agri-food.
France's exports have been lower than its imports for some 20 years. To address the trade deficit and encourage businesses to export, the French government launched a plan in August, entitled « Dare export » including a €125 million envelope over the period 2023-2026, in particular to help SMEs (small and medium-sized enterprises) and mid-size enterprises (ETIs) to strengthen their international presence. In 2022, 145,700 French companies, mainly large companies and ITEs, exported. A figure that Paris would like to raise to 200,000 by 2030.
Source(s): Customs.gouv.fr | IMF | The Echoes
Editor(s): C. Bedouin