French trade deficit doubles
The trade deficit in France almost doubled last year and reached a new record as the country’s energy imports surged, official data published on Tuesday showed.
France’s trade deficit jumped to €164 billion ($176 billion) from €86 billion year-on-year, triggered by the energy crisis in the EU. According to trade ministry data, 86% of that increase was directly due to surging imports of oil, gas and electricity.
Energy flows to the EU from Russia dropped to historic lows last year over the conflict in Ukraine, pushing prices up to record levels. To make up for the shortfall, EU nations have ramped up LNG shipments from all over the world. The alternative, however, is much more costly than energy resources provided by Moscow.
Like many other EU countries Paris beefed up its imports in a rush to fill its gas storage for winter. But with gas prices five to ten times higher than two years ago, the country’s industrial output was put at risk of decline.
High oil prices have also contributed to the deficit, as France has become a net importer of electricity. Roughly 70% of the country’s electricity is being produced from nuclear power generation. However, last year a record number of French nuclear plants went offline for maintenance, posing the threat of rolling blackouts.
While France is less dependent on Russian energy than other EU countries, the lack of domestic power generation normally provided by nuclear plants has forced the country to buy electricity from its neighbors.
At the same time, the depreciation of the US dollar, which made goods from the Eurozone more expensive on international markets and supply chain problems added to the deficit, the data showed.
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