France's balance of payments 2021Mar
Published on 7 May 2021
Current account deficit widened in the first quarter 2021
The first quarter of 2021 recorded a worsening in the current account deficit, which stood at 7.2 billion euros after 2.2 billion in the last quarter of 2020 (seasonally adjusted data). While the deficit in goods slightly reduced, the surplus in services deteriorated and the income balance turned negative.
The reduction in the deficit in goods excluding energy by 2.9 billion euros was partially offset by the increase in the energy bill by 2.2 billion euros. The lower surplus in services stemmed from the deterioration in the balance of consulting, R&D and trade-related services. Lastly, the income balance deteriorated by 4.3 billion euros, mainly due to a reduction in the investment income surplus of 3.3 billion euros.
In March 2021, the current account deficit stood at 2.9 billion euros, deteriorating by 0.7 billion euros from February, driven by a 1.8 billion euros increase in the goods deficit.
The financial account balance recorded net capital inflows of 15.6 billion euros in the first quarter, after net outflows of 16.8 billion euros (non-seasonally adjusted data). The increasing net inflow of loans and deposits (112.1 billion euros after 0.4 billion) was to a large extent offset by portfolio investments (net outflow of 101.5 billion euros).
The reduction in the deficit in goods excluding energy by 2.9 billion euros was partially offset by the increase in the energy bill by 2.2 billion euros. The lower surplus in services stemmed from the deterioration in the balance of consulting, R&D and trade-related services. Lastly, the income balance deteriorated by 4.3 billion euros, mainly due to a reduction in the investment income surplus of 3.3 billion euros.
In March 2021, the current account deficit stood at 2.9 billion euros, deteriorating by 0.7 billion euros from February, driven by a 1.8 billion euros increase in the goods deficit.
The financial account balance recorded net capital inflows of 15.6 billion euros in the first quarter, after net outflows of 16.8 billion euros (non-seasonally adjusted data). The increasing net inflow of loans and deposits (112.1 billion euros after 0.4 billion) was to a large extent offset by portfolio investments (net outflow of 101.5 billion euros).
Current account and GDP
(in EUR billions and in % of GDP, cumulated figures for the four-quarter period
sources : Banque de France - DGSEI ; ECB for external data)
sources : Banque de France - DGSEI ; ECB for external data)
| 2020 | 2021-Q1 (*) | |||
| Amount | Percentage of GDP | Amount | Percentage of GDP | |
| France | -43.6 | -1.9 | -41.9 | -1.8 |
| Germany | 231.9 | 7.0 | ||
| Spain | 7.4 | 0.7 | ||
| Italy | 59.9 | 3.6 | ||
| United Kingdom | -80.1 | -3.4 | ||
(*) "Cumulated figures for the four-quarter period"
Goods and services
(Cumulated figures for the four-quarter period, Percentage of GDP)
Current account 
| (EUR billions) | Mar-21 (a) |
2020 Q4 (a) |
2021 Q1 (a) |
Cum. Fig. 4 quarter period (a) |
2019 (b) |
Cum. Fig. 4 quater period / 2019 |
| Current account (seasonally and working-day adjusted) | -2.9 | -2.2 | -7.2 | -41.9 | -16.2 | ↓ |
| Goods (1) | -4.3 | -10.5 | -9.8 | -60.6 | -46.8 | ↓ |
| Energy | -2.5 | -5.1 | -7.3 | -23.4 | -42.7 | ↑ |
| Goods excl. Energy | -1.9 | -5.4 | -2.5 | -37.1 | -4.2 | ↓ |
| Services | 1.9 | 5.5 | 4.1 | 14.5 | 21.6 | ↓ |
| Travel | 0.2 | 1.0 | 0.7 | 3.5 | 10.8 | ↓ |
| Transport services | 0.7 | 0.5 | 1.5 | 0.1 | -5.0 | ↑ |
| Professional and management consulting services, Research and development and Technical services , trade-related and other business services | 0.1 | 2.5 | -0.7 | 5.0 | 7.2 | ↓ |
| Other services (2) | 0.9 | 1.5 | 2.6 | 6.0 | 8.6 | ↓ |
| Primary and secondary income (3) | -0.5 | 2.8 | -1.5 | 4.2 | 9.0 | ↓ |
(a) Provisional data (b) Annual report 2019 data
(1) to (3) See methodological notes on page 2.
(1) to (3) See methodological notes on page 2.
Source and production : BANQUE DE FRANCE - DGSEI
Goods
(seasonally and working-day adjusted, EUR billions)
Services
(seasonally and working-day adjusted, EUR billions)
Capital account and financial account
| (EUR billions) | Mar- 21 (a) |
2020 Q4 (a) |
2021 Q1 (a) |
Cum. Fig. 4 quarter period (a) |
2019 (b) |
| Capital account (brut) | 0.3 | 0.3 | 0.6 | 1.6 | 1.9 |
| Financial account (not adjusted) | -5.8 | 16.8 | -15.6 | -38.3 | -28.8 |
| Direct investment | 2.0 | 4.2 | -1.4 | -1.1 | 4.2 |
| - Abroad | 2.8 | 23.5 | 6.7 | 40.4 | 49.8 |
| - In France | 0.8 | 19.3 | 8.1 | 41.5 | 45.6 |
| Portfolio investment | -24.5 | 21.8 | 101.5 | 78.6 | -93.0 |
| -Assets | 14.4 | 1.6 | 136.1 | 239.2 | 53.2 |
| -Liliabilities | 39.0 | -20.3 | 34.6 | 160.6 | 146.2 |
| Financial derivatives | -4.5 | -9.8 | -2.3 | -2.5 | 3.7 |
| Other investment (4) ) | 21.9 | -0.4 | -112.1 | -112.3 | 53.4 |
| Reserve assets | -0.7 | 1.0 | -1.4 | -1.0 | 2.8 |
(a) Provisional data (b) Annual report 2019 data
(4) See methodological notes on page 2
(4) See methodological notes on page 2
Methodological notes relating to page 1 and page 2 tables
(1) Data on trade in goods are FOB-FOB values, which means without cost, insurance and freight. The latter expenditure is recorded in the services item. Exchanges of goods include general merchandise as published by the Directorate General of Customs and Excise (DGDDI) on one side, merchanting and methodological adjustments calculated by the Banque de France, on the other side. It ensures the comparability of French balance of payments with those of other countries and its conformity with the international standards set by International Monetary Fund. The key underlying concept in balance of payments is the economic ownership (as for the national accounts).
(2) Services other than travel (tourism and professional travels), transport services, professional and management consulting services, R&D and development and technical services, trade-related and other business services include manufacturing, maintenance and repair, construction, insurance and pension services, financial services, charges for the use of intellectual property, telecommunication, computer and information services, personal, cultural and recreational services and government goods and services.
(3) Income includes primary and secondary incomes. Primary income refers to the flows received by economic agents for their participation in the production process ("compensation of employees") or for the provision of financial assets ("investment income") or for the rental of natural resources ("rent"). Taxes and subsidies on products and production are also included in primary income. Secondary income records current transfers between residents and non-residents. A transfer is a transaction that involves the provision of a good, service, financial asset or another non-produced asset without receiving something of economic value in exchange.
(4) The "other investment" (loans and deposits) component of the financial account includes all transactions in financial assets and liabilities with non-residents that do not concern direct investment, portfolio investment, financial derivatives or reserve assets. In practice, this mainly concerns bank deposits and interbank lending, as well as loans and deposits made by insurance companies and all kinds of investment companies and funds.
(2) Services other than travel (tourism and professional travels), transport services, professional and management consulting services, R&D and development and technical services, trade-related and other business services include manufacturing, maintenance and repair, construction, insurance and pension services, financial services, charges for the use of intellectual property, telecommunication, computer and information services, personal, cultural and recreational services and government goods and services.
(3) Income includes primary and secondary incomes. Primary income refers to the flows received by economic agents for their participation in the production process ("compensation of employees") or for the provision of financial assets ("investment income") or for the rental of natural resources ("rent"). Taxes and subsidies on products and production are also included in primary income. Secondary income records current transfers between residents and non-residents. A transfer is a transaction that involves the provision of a good, service, financial asset or another non-produced asset without receiving something of economic value in exchange.
(4) The "other investment" (loans and deposits) component of the financial account includes all transactions in financial assets and liabilities with non-residents that do not concern direct investment, portfolio investment, financial derivatives or reserve assets. In practice, this mainly concerns bank deposits and interbank lending, as well as loans and deposits made by insurance companies and all kinds of investment companies and funds.
On the Banque de France website a detailed methodological note on balance of payments and international investment position can be found.
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Updated on 6 May 2021