France's trade deficit narrowed unexpectedly in May driven by a broad rebound in exports, data on Tuesday showed, providing further evidence that conditions are improving in the eurozone's second-biggest economy. Data released by the customs office showed the trade deficit fell in May to 2.718 billion euros from an upwardly revised 3.841 billion in April.
Exports rose to 28.039 billion euros from 26.828 billion previously. At the same time, imports were little changed at 30.757 billion euros compared with 30.669 in April. Analysts polled by Reuters had been expecting a substantially higher deficit of 3.7 billion euros in May. "This is another green shoot," said Dominique Barbet, economist at BNP Paribas. Industrial output data for France is due on July 10 and analysts polled by Reuters are predicting improvement after April's 1.4 percent drop.
May's rebound in exports was widespread with nearly all sectors registering an improvement, except for pharmaceutical goods and hydrocarbons. Transport equipment saw the biggest rise, with exports hitting 5.833 billion euros in May compared with 5.259 billion the previous month. Sales of Airbus aircraft, one of France's most prominent export items, remained stable at 26 for a total of 1.632 billion euros against 26 for 1.364 billion in April.
France saw higher sales to nearly all its foreign trading partners, with deliveries to Germany in particular climbing to 4.233 billion euros from 3.828 in April. Imports were no longer falling but nonetheless remained stable on the month, signalling that domestic demand is still fragile, he said. Recent data showed French consumer spending, which accounts for over half of gross domestic product, dropped unexpectedly in May amid growing uncertainty over the health of the labour market.
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