Report

France's balance of payments and international investment position 2023

Published on the 15th of November 2024

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.

In 2023, the current account deficit reached EUR 28.1 billion, virtually unchanged when compared to 2022 (EUR 31.1 billion). The marked decline in energy commodity prices, which reduced the trade in goods deficit, was offset by a simultaneous decrease in the trade in services surplus (i.e. the fall in sea freight prices, which impact exports) and investment income due to higher interest rates.

Consequently, the current account deficit was significantly higher than its average over the last ten years (EUR 15 billion). Although it has come down, the energy bill is still higher than its long-term average, as is the case with non-energy customs trade, for which the deficit has increased. These trends were only partially offset by a slightly higher-than-average trade in services surplus.

As a result, the financial account recorded net capital inflows of EUR 35.7 billion, a level equivalent to that of 2022. Portfolio investment continues to cover the bulk of the nation's borrowing requirements, with net capital inflows of EUR 138.9 billion.

France's net international investment position deteriorated by EUR 133.5 billion year on year, to EUR 792.9 billion – or by 28.1% of GDP, compared with a deterioration of 24.8% in 2022 – mainly as a result of the current account deficit, movements in asset prices and the euro exchange rate, which made resident assets held by non residents more expensive than non-resident assets held by residents.

Updated on the 19th of November 2024