France's trade deficit narrowed in the first half of 2009 compared with the same period last year, mainly due to lower energy prices, though on a month-on-month basis the deficit widened in June, data showed.

The June trade balance was -4.008 billion euros ($-5.75 billion), bigger than a revised -3.137 billion in May, taking the year-to-date total to -25.374 billion, according to the customs office.

"Exports have fallen back to a historically low level, a sign that improvement in the world economy is struggling to take hold," said Alberto Balboni, economist at Xerfi in Paris.

"It's likely that the trade deficit will grow further for the full year. For once though, that would be quite a good thing for the French economy in the sense that it would result from resilient household demand," he said.

France's imports bill rose to 31.449 billion euros in June compared with 31.045 billion in May.

The first half deficit was lower than the -26.762 billion recorded in the first six months of 2008. Secretary of State for Trade Anne-Marie Idrac said this was mostly due to the sharp drop in energy prices that took place between the two periods.

In year-on-year terms, French exports fell by 16.8% in the first half of the year, while imports were down by 15.4%.

"These results reflect the deep crisis in international trade over the past year," Idrac said in a statement.

"After a sharp drop at the beginning of the year, we have seen a stabilization of exports over the past months. That indicator adds to those pointing to a certain softening of the situation," she added.

The deficit for the month of June, however, was significantly bigger than the -3.0 billion euros expected by analysts, while the May deficit was revised upwards from an initially reported -2.718 billion euros.

Exports fell to 27.441 billion euros in June from 27.908 billion in May.

Deliveries of Airbus planes, one of France's most prominent export items, remained stable at 26 units for a total of 1.408 billion euros against 26 units for 1.632 billion in May.

Airbus reported record deliveries in 2008 and is aiming to at least match that in 2009, but orders have plummeted. Airlines pay the bulk of plane purchases on delivery.

Trade in manufactured items evolved unfavorably for France in June, with the balance widening to -2.126 billion euros compared with -1.129 billion in May.

Looking at the year-on-year progression, Idrac noted that French exports of metal industry products fell by 30% in the first half while basic chemicals were down by 22%, hit by recession in neighboring countries.

Pharmaceuticals, a French strength, was a brighter spot with exports rising four percent year-on-year in the first half.

Idrac said auto exports, which rose by eight percent in the second quarter compared with a 16.5% drop in the first, had improved thanks to schemes introduced in some countries whereby new car buyers get cash for scrapping their old ones. (Reuters)