France's current account deficit widened to some €4 billion in July from an €0.8 billion deficit in June, data showed today.
The Bank of France said the merchandise trade deficit widened by €1 billion to €3.7 billion, affected by a decline in exports while imports continued to progress.
"We have bad industrial production figures, a bad foreign exchange (rate), and that (adds up to a) lack of competitiveness. A stronger euro has penalised French companies," said Alexander Law, chief economist at consulting firm Xerfi in Paris.
"But that does not explain why trade with Germany and the rest of the euro zone has really deteriorated, which shows that there is a real lack of competitiveness in French industry."
He noted that in Germany, many small and medium-sized companies were big enough to be able to sell abroad. "Small French companies just lack that critical mass to be able to export efficiently."
The Bank of France data showed the income surplus fell to €1.4 billion from €2.5 billion in June, while the services balance moved into a deficit of €400 million after a marginal surplus of €3 million in June.
The current account figures came after recent data showed France's trade deficit widened sharply to the largest monthly shortfall in at least 10 years.