France recorded a current account deficit of EUR 2.2 billion in January 2025, widening from an upwardly revised EUR 2.6 billion shortfall in December 2024.
France current account swings to deficit
This marked the largest external imbalance since October 2024, driven primarily by a sharp deterioration in the goods trade balance. The goods account deficit surged to EUR 5.8 billion from just EUR 0.8 billion in the prior month, reflecting weaker exports and sustained demand for imports. The decline in export performance may be linked to softer external demand from key trading partners, ongoing global trade tensions, and a slowdown in manufacturing activity across the Eurozone.
Meanwhile, the services sector remained a bright spot, though the services account surplus narrowed slightly to EUR 3.5 billion from EUR 3.7 billion, suggesting some moderation in France’s typically strong performance in tourism, finance, and business services.
Primary income surplus expanded
On the income side, the primary income surplus—comprising wages, dividends, and interest earnings—expanded to EUR 4.4 billion in January from EUR 3.9 billion in December, supported by increased earnings from French investments abroad. However, the secondary income deficit, which includes transfers such as foreign aid and remittances, remained unchanged at EUR 4.3 billion, continuing to weigh on the overall current account balance.
Looking ahead, France’s external sector faces multiple challenges, including subdued global demand, the impact of trade policies, and fluctuating energy prices. Policymakers will likely keep a close eye on trade flows and competitiveness, especially as the country navigates a complex economic environment marked by tight monetary conditions and fiscal adjustments within the Eurozone.
