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French official trade deficit widens despite rosier outlook

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(Globalpost/GlobalPost)

France's trade deficit widened in July, customs agency data showed on Friday, as energy imports increased and bumper export performance earlier in the year fell back.

The French deficit grew by 600 million euros in July to 5.1 billion euros ($6.7 billion).

On a 12-month basis, the deficit reached 61.3 billion euros, lower than the 67 billion euros reached for all of 2012.

France has a big and structural trade deficit, a central concern for the left-wing government which has made raising industrial competitiveness a priority.

The latest widening of the deficit is in contrast with recent more upbeat data.

France emerged from recession in the second quarter of the year, albeit it largely because of energy consumption in a hard winter, and other indicators suggest that activity is picking up.

French exports had also shown promise earlier this year, largely from booming business in big ticket sectors such as aerospace, chemicals and defence.

But in July, exports grew by a relatively slim 500 million euros to 36.5 billion, with the auto and rail sector showing difficulty, the agency said.

Imported energy grew strongly meanwhile, pushing overall imports up 1.1 billion euros to 41.6 billion euros.

Also Friday, household sentiment data seemed to reflect a rosier view of France's economy, with respondents indicating greater optimism, figures from the INSEE data agency showed

The indicator gained two points to 84 points in August, following a three point rise in July, but still remains beneath the long-term average of 100.

New data also showed that the state budget deficit had narrowed by 4.7 billion euros at the end of July, largely on higher than expected tax revenues.

On July 31, France's accumulated budget deficit stood at 80.8 billion euros, down from 85.5 billion euros in July.

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http://www.globalpost.com/dispatch/news/afp/130906/french-official-trade-deficit-widens-despite-rosier-outlook