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French 2008 trade deficit at record on oil prices

Published 02/06/2009, 03:18 AM
Updated 02/06/2009, 03:24 AM
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PARIS, Feb 6 (Reuters) - France's trade deficit hit a record 55.7 billion euros ($71.35 billion) in 2008, hurt by high oil prices early in the year and by the impact of the economic crisis on major trading partners, data on Friday showed. The French customs office said the seasonally adjusted trade deficit for December surprisingly narrowed to 2.45 billion euros from a revised deficit of 6.02 billion euros in November, lifted by sales of Airbus aircraft and the sale of an ocean liner.

That was well below the expectations from economists polled by Reuters who forecast a deficit of 5.7 billion euros.

France, the euro zone's second largest economy, is expected to tip into recession in 2009 as rising unemployment has eaten into consumer confidence and demand for manufactured goods has fallen off.

High oil prices in the earlier part of 2008 were mainly responsible for the sharp widening of the deficit from 40.6 billion euros in 2007, with 80 percent of the difference down to energy costs, Trade Minister Anne-Marie Idrac said.

Total exports rose 2.1 percent in 2008, while imports were up 5.3 percent, mainly due to oil prices, she said.

Exports of food (+8 percent), consumer goods (+3.5 percent) and capital equipment (+4 percent) all rose but automobile exports dropped 10 percent as the economic slowdown ravaged global car sales. (Reporting by James Mackenzie, editing by Chris Pizzey)

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