French trade deficit hits record in February

France's trade deficit hit a record in February as higher raw materials prices pushed up the cost of imports of chemicals and metals while exports of industrial goods lagged. The customs agency said on Thursday the deficit jumped to 6.553 billion euros ($9.37 billion), far more than the average forecast in a Reuters poll of 7 economists for a deficit of 5.7 billion.
The deficit for January was also revised higher to 6.12 billion euros against an original reading of 5.89 billion. For the first two months of 2011, the deficit rose to 12.677 billion euros against 7.003 billion the year earlier. Budget Ministry officials said the spike in the deficit was due largely to a jump in raw materials purchases in February, particularly in the chemicals sector, and did not reflect an underlying trend.
Private economists disagreed, pointing to a broad-based deterioration in French exports. The level of coverage of imports by exports in February fell to its lowest level on record, 84 percent. "The deterioration of the deficit has resumed," she said. Alberto Balboni, economist at consultancy Xerfi, noted that France's industrial exports performed poorly as aerospace sales abroad fell in the first two months after a strong final quarter of 2010. Aerospace exports make up around one-tenth of France's total. France sold 23 Airbus planes in February for 1.522 billion euros against 16 in January for 1.141 billion, the customs agency said.