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France's balance of payments and international investment position 2021

Published on 27 June 2022

As part of its core duties, and in accordance with Article 141-6 of the French Monetary and Financial Code (Code monétaire et financier), the Banque de France is responsible for establishing France’s balance of payments and international investment position. The report provides a comprehensive overview of France’s economic, financial and monetary situation with regard to the rest of the world. It examines information provided to the Banque de France by financial intermediaries, businesses and public administrations in order to draw up the French balance of payments and international investment position in accordance with the methodology recommended by the International Monetary Fund and agreed with its member countries. An analysis of France’s balance of payments – current account (goods, services, primary and secondary income), capital account, financial account (direct investment, portfolio investment, other investment, including bank loans and deposits, financial derivatives and reserve assets) – is followed by a presentation of its international investment position.

With the economic situation gradually returning to normal following the health crisis, the current account balance showed a surplus of EUR 9 billion (following a deficit of EUR 41.5 billion in 2020 and a surplus of EUR 12.5 billion in 2019), with the trade deficit more than offset by a surplus in primary income and services.

  • The goods deficit continued to widen, mainly due to the rise in the energy bill.
  • The services surplus recovered, thanks in particular to transport services. The tourism surplus remained quite static with receipts and payments seeing a partial recovery.
  • Income rose significantly, in particular direct investment income, following the general economic recovery that saw a return to significantly higher profits and dividends.

The financial account recorded net capital outflows of EUR 3 billion, which was in line with the improvement seen in the current account balance. Net capital outflows for financial derivatives and reserve assets were partially offset by the net direct investment and portfolio investment inflows.

However, the net international investment position (NIIP) fell by EUR 92.5 billion, representing –32.3% in GDP (compared with –30.8% in 2020), mainly due to rising stock market prices. However, the valuation method chosen for direct investments clearly minimises both the level and changes in the NIIP.

9.0 bn

Surplus in euro qhich includes the balance for trade and for income paid and received from abroad

32.3

32.3% of GDP: France's negative international investment position reflects the fact that the country's stock of assets with the rest of the world is smaller than its stock of liabilities

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