PARIS: France’s exports of goods should rebound this year after deterioration in the current account weighed on growth last year, the central bank said.
Bank of France governor Francois Villeroy de Galhau said that a recovery in the euro zone and broader global economies would drive a rebound in exports this year.
“The net contribution from foreign trade, which was negative for growth in 2016 due to the deterioration in the current account balance, should be neutral or even slightly positive in the coming years,” Villeroy de Galhau told journalists at a presentation of an annual report on the balance of payments.
France’s current account deficit doubled last year to 19 billion euros ($20.7 billion), or 0.9 percent of economic output, despite a lower energy import bill as its services surplus evaporated and exports weakened slightly, said the report.
Partly thanks to its status as the world’s top tourist destination, France has long run a surplus in services with the rest of the world, helping to offset its large trade deficit.
However, attacks by Islamist militants in Paris and Nice – which have killed more than 230 people in the past two years – have impacted the country’s tourism industry.
That in turn has added to the negative impact on services from a decline in French consultants and engineers’ activity, and increased competition from eastern European truckers and foreign low-cost airlines, the central bank added in the report.
