The balance of payments and international investment position

The balance of payments measures transactions between residents and non-residents, i.e. between economic agents (banks, businesses, households, public administrations) that conduct their business in France and economic agents that conduct their business abroad. The balance of payments shows all transactions with the rest of the world in the current account and financial account. The current account covers economic transactions, which reflect trade in goods and services and income transfers. The current account balance is a measure of a country’s (in our case, France) ability to balance its trade with other countries. Transactions included in the financial account arise from the financial dealings of resident economic agents with foreign countries. They are broken down into direct, portfolio and financial derivatives investments, other investment and reserve asset income. The financial account balance represents the financial counterpart to current account flows.

The net international investment position shows the net assets or liabilities of the French (residents) relative to the rest of the world. A negative value means that French residents have received more capital from abroad (mainly in the form of debt or capital investments) than they have invested in foreign countries.

The current account balance improved significantly in 2024, returning to a surplus of EUR 2.7 billion after two years of deficits (EUR 29.4 billion in 2023 and EUR 37.7 billion in 2022). This improvement was attributable to both a reduction in the trade deficit, driven by a sharp decline in energy costs and a recovery in trade in industrial goods, and a further increase in the services surplus. The income surplus contracted slightly, reflecting a narrowing in the gap between implicit interest rates on foreign assets and interest rates on liabilities with non-residents, which had remained relatively stable between 2013 and 2022.

In particular, in 2024 the trade in services balance returned to a level close to that of 2022, confirming the favourable trend that began in the early 2020s. This momentum was driven in particular by exceptionally buoyant exports of intermediate services, especially services to businesses. Compared to the period before the health and energy crises (due to Russia's invasion of Ukraine), the current surplus is now underpinned by a services surplus that is greater than the average observed over the previous decade, although this is partly offset by an energy bill that remains high in a context of prices that are still greater than those before the energy crisis.
After two years of exceptional net capital inflows, the financial account balance was close to equilibrium in 2024 with net capital inflows of EUR 6.9 billion. Amidst contracting flows of assets and liabilities, the portfolio investment balance has reversed and net capital outflows amounted to EUR 51.0 billion. These mainly concern equity investments, but were offset by net inflows of other categories of financial instruments.

France's net international investment position improved by EUR 230.0 billion year on year, to a negative amount of EUR 670.4 billion, or -22.9% of GDP, compared with -31.9% in 2023 – mainly as a result of valuation gains, attributable almost entirely to the rise in asset prices and, to a lesser extent, to the depreciation of the euro, which have benefited assets held by residents’ more than liabilities owed to non-residents.

Since 1948, the balance of payments has been compiled according to an internationally applied methodology developed by the International Monetary Fund (IMF) and set out in its Balance of Payments and International Investment Position Manual (BPM6). The balance of payments has been the main statistical reference document since the IMF’s creation for providing a global and harmonised view of the development of international trade and for measuring its balances and imbalances. France’s balance of payments and international investment statistics comply with the IMF’s BPM6 manual.

In accordance with Article L. 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 Banque de France has the authority to obtain any documents and information it may require from all economic and financial agents. The full legislative and regulatory framework is available on the reporting entities page.

Banque de France implementation of the coordinated European Quality Framework for Balance of Payments statistics.

The balance of payments statistics contribute to the production of a European scoreboard of indicators on the prevention and correction of macroeconomic imbalances.

Given the importance of these statistics in analysing the national economy – and indeed for making comparisons between national economies – the Banque de France lends its support to international initiatives to assess the quality of balance of payments statistics. It has voluntarily adopted the most rigorous international standards, particularly the Data Quality Assessment Framework defined by the International Monetary Fund and the Committee on Monetary, Financial and Balance of Payments Statistics (CMFB) roadmap.

The CMFB acts as a coordination forum for central banks, national statistical institutes, the European Central Bank and Eurostat to draw up recommendations and advise the European Commission on monetary, financial and balance of payments statistics.

The legal framework of reference is Article L. 141-1 of the French Monetary and Financial Code (Code monétaire et financier), underpinned by Article 130 of the Treaty on the Functioning of the European Union and Article 7 of the Statute of the ESCB and the ECB, guaranteeing the Banque de France’s independence in the performance of its duties. Furthermore, Article L. 141-6 of the French Monetary and Financial Code gives the Banque de France exclusive authority with regard to the preparation of France's balance of payments.

The data collection process is based on the 6th Edition of the International Monetary Fund's Balance of Payments and International Investment Position Manual, and the statistics produced are made available by the Banque de France itself, via the annual balance of payments report and the Banque de France website's data series download portal, Webstat.

The Banque de France also reports these statistics to international and European institutions, notably the European Central Bank (ECB) and Eurostat. The data are then used to prepare the balance of payments for the euro zone and the European Union.