20 13 annual report the french balance of payments … · balance of payments directorate sectoral...

A N N U A L R E P O R T

THE FRENCH BALANCE OF PAYMENTS AND INTERNATIONAL INVESTMENT POS I T ION

2013

BANQUE DE FRANCE

DIRECTORATE GENERAL STATISTICS

Balance of Payments Directorate

Sectoral Surveys and Statistics Directorate

121-13

Contents

the french balance of payments and international investment position

annual report • 2013 5

Overview 7

Chapter 1 Current aCCOunt 15

1| Goods 161|1 General merchandise 161|2 Goods procured in ports by carriers and merchanting 18

2| Services 182|1 Transport services 182|2 Travel 192|3 “Other services” 20

3| Primary income 203|1 Direct investment income 213|2 Portfolio investment income 213|3 Income from “other investment” and reserve assets 213|4 Other primary income and compensation of employees 22

4| Secondary income 22

Chapter 2 FinanCial aCCOunt 23

1| Direct investment 241|1 Direct investment abroad 241|2 Direct investment in France 25

2| Portfolio investment 252|1 Liabilities (non-residents’ transactions in securities issued by residents) 262|2 Assets (residents’ portfolio investment in securities issued by non-residents) 27

3| Financial derivatives 27

4| Other investment (loan-deposit position) 274|1 Loan-deposit position of monetary financial institutions (MFIs) 284|2 Loan-deposit position of sectors other than MFIs 28

6the french balance of payments and international investment position

annual report • 2013

CONTENTS Chapter 3 internatiOnal investment pOsitiOn 29

1| Direct investment 311|1 Direct investment abroad 311|2 Direct investment in France 32

2| Portfolio investment 342|1 Assets (residents’ portfolio investment in securities issued by non-residents) 342|2 Liabilities (non-residents’ transactions in securities issued by residents) 34

3| Financial derivatives 35

4| Other investment (loan-deposit position) 35

5| Reserve assets 36

2012 and 2013 BalanCe OF payments – detailed presentatiOn 37

appendiCes

Part I Glossary A1

Part II Definition of geographical zones A9

Part III Balance of payments – Revisions of 2011 and 2012 data A11

Part IV International Investment Position – Revisions of 2011 and 2012 data A15

Further information about the new methodology and its implementation in France can be found on the Banque de France website:

https://www.banque-france.fr/en/economics-statistics/database/methodology/methodology-for-the-balance-of-payments-and-international-investment-position.html

The supplementary statistical tables are not included in the French Balance of Payments and International Investment Position Annual Report. However, they can be found on the Banque de France website

at the following address: https://www.banque-france.fr/en/economics-statistics/balance-of-payments-and-other-international-

statistics/balance-of-payments-and-international-investment-position.html

Boxes

1 Implementation of the new international balance of payments standards 8

2 Trade in goods: from customs data to the balance of payments 9

3 Trade in goods: from customs data to balance of payments data 17

4 Trade in goods: market shares 18

5 Transfers with European Union institutions 22

6 Direct investment stocks in France by the country of residence of the ultimate controlling parent 33



https://www.banque-france.fr/en/economics-statistics/balance-of-payments-and-other-international-statistics/balance-of-payments-and-international-investment-position.html


Overview



OVERVIEW C0-1 Current account

(EUR billions)

-120-100-80-60-40-20

20406080

100

Goods

ServicesPrimary income

Secondary incomeCurrent account

0

2008 2009 2010 2011 2012 2013

Source: Banque de France.

T0-1 Main current account components

(EUR billions)

2011 2012 2013

Current account -22.3 -31.8 -30.3(% of GDP) -1.1 -1.5 -1.4Goodsa) -64.8 -54.6 -42.5Services 24.0 24.7 18.3

Primary income 56.0 40.7 39.3Secondary income -37.5 -42.6 -45.3

a) Trade in goods is compiled on the basis of customs statistics and supplementary measurements (see Box 2).Source: Banque de France.

I n 2013, France’s current account, which records imports and exports of goods and services, as well as income flows between residents and

non‑residents, showed a deficit of EUR 30.3 billion. This is equivalent to 1.4% of GDP and compares to deficits of 1.5% of GDP in 2012 and 1.1% of GDP in 2011.1

The implementation of new international balance of payments standards meant that the current account deficit had to be revised downwards by 0.4 percentage point of GDP in 2011, 2012 and 2013. More specifically, the change in methodology led to improved treatment of data collected on trade in services (0.1 point), incorporation of Eurostat data on the balance of payments of European

institutions (0.1 point) and improved calculation of portfolio investment income (0.1 point).2

After deepening in 2011 and 2012, the 2013 current account deficit was smaller than before the 2008 crisis.

Box 1

Implementation of the new international balance of payments standards

The need has long been felt for a standardised frame of reference in order to achieve international harmonisation of statisticians’ practices. The IMF recently introduced new standards (the 6th edition of the Balance of Payments Manual or BPM6). The European Union countries’ balances of payments and international investment positions must be compiled under the new standards by November 2014 at the latest, with back‑data series covering several years. In France, the first data release in the new format came out in March 2014 and related to the data for January 2014.

The Banque de France website presents the main features of the international statistical reform: https://www.banque-france.fr/en/economics-statistics/database/methodology/methodology-for-the-balance-of-payments-and-international-investment-position.html

The BPM6 statistical data will provide a better picture of the global chain of international trade in goods and services, where a growing share takes the form of successive contributions from several countries. The main changes concern trade in goods and services (merchanting, goods for processing, insurance services), income from activities in other countries and financial transactions (direct investment). The new method is based on the principle of the change of economic ownership between residents and non‑residents, which is also used for calculating GDP. This change does not necessarily correspond to the flow of goods across borders or the completion of cross‑border services, or even to payments (intragroup flows). The revisions are explained in detail in the Appendix (Part III).

BPM6 also requires more precise calculation of countries’ international investment positions. Reliable knowledge of international investment positions has proven to be essential for recognising potential macroeconomic imbalances.

1 Based on the GDP published by Insee on 15 May 2014.2 See Appendix (Part III) for a more detailed description.






OVERVIEWC0-2 Exports and imports of goods and services

(balance in EUR billions) (flows in EUR billions)

Goods – balance (left-hand scale)Services – balance (left-hand scale)Goods and services – balance (left-hand scale)

Goods – receipts (right-hand scale)Goods – payments (right-hand scale)

Services – receipts (right-hand scale)Services – payments (right-hand scale)

-100

-75

-50

-25

0

25

50

75

100

100

150

200

250

300

350

400

450

500

2008 2009 2010 2011 2012 2013


C0-3 Market shares of European countries

(base: 2000 = 100)

40

50

60

70

80

90

100

110

120

130

2000 2002 2004 2006 2008 2010 2012

FranceGermany

ItalySpain

United Kingdom

Source: IMF; calculations by Banque de France.

The European Commission’s alert threshold is breached when the 3‑year backward moving average of the current account balance shows a deficit that is greater than 4% of GDP or a surplus that is greater than 6% of GDP. The European indicator for France, calculated using the data from this report and the national accounts compiled under the new inter‑national standards, shows a deficit equal to 1.3% of GDP.

The improvement in trade in goods and services seen in 2012 continued in 2013. The deficit shrank by 5.7 billion in 2013, after falling by 11 billion in 2012.

The smaller deficit on goods and services stems from the stability of goods imports in 2012. The 5.8% fall in

oil prices in euro in 2013 made a big contribution to reducing France’s CIF‑FOB energy bill by 6.9%, according to customs data. More generally speaking, imports of most broad categories of goods decreased.

The decline in imports stems primarily from weak domestic demand in France. More specifically, busi‑ness investment, particularly in tangible assets, declined in 2013. Imports account for a large share of this GDP component.

Exports of goods were stable in nominal value in 2013, with a slight decline towards the end of the year. The world market shares of France and the United Kingdom have particularly shrunk in recent years.

Box 2

Trade in goods: from customs data

to the balance of payments

Trade in goods is primarily measured on the basis of customs data on merchandise transactions and Banque de France surveys on merchanting. According to international standards for balance of payments statistics, trade in goods is measured in FOB‑FOB terms (free on board). This means that freight costs to the French border are classified under transport services. The Banque de France then subtracts transactions with no payment, which are nearly always intragroup transactions, so that trade in goods covers only physical flows with an actual change of economic ownership. It then adds goods procured in ports by carriers and merchanting, which covers transactions where ownership of goods changes even though they may pass through France only briefly, if at all.

T0-2 Exports and imports of goods and services

(EUR billions)

2012 2013

GoodsExports 436 437Growth in % 3.4 0.3Imports 491 480Growth in % 0.8 -2.2ServicesExports 184 192Growth in % 8.3 4.3Imports 159 174Growth in % 9.1 9.1




OVERVIEW Trade in services grew more rapidly than trade in goods. Several factors explain this, including the possibilities offered by information technology for selling services remotely. The gap between the growth of trade in goods and trade in services was particularly stark in 2012 and 2013. Exports of services were up by 4%, but imports of services increased by 9%.

Receipts for “technical, trade‑related and other business services” rose by 13 billion and payments increased by 11 billion.

Travel was still a major component of service exports. Net receipts were virtually stable in 2013, after growing by 3 billion between 2011 and 2012 to reach 10 billion.

Payments for “telecommunication, computer and information services” increased by 4 billion, deepening the deficit on this item. Similarly, transport services continued to post a deficit, as payments increased by more than 2 billion, or some 7%.

Finally, receipts from charges for the use of intellec‑tual property fell by 2 billion over 2 years, shrinking by 21%. This decline made a clear contribution to the decline in the surplus on this item. Part of the decline stems from the expiry of royalties and licence fees in the pharmaceutical sector, with no new inventions to pick up the slack.

Most of France’s deficit on trade in goods stems from the deficit on its trade with the euro area, which accounts for 31 billion of the aggregate 42‑billion deficit, especially its trade with Germany. France also has a large deficit on its trade with China, standing at 21 billion, whereas its trade deficit vis‑à‑vis the United States stands at 4.5 billion. On the other hand, France has a large surplus of 8 billion on its trade with the United Kingdom.

France’s largest bilateral surpluses on trade in services are with Switzerland, the United Kingdom and Germany. More generally speaking, France shows surpluses in its trade in services with most countries, but these surpluses are often quite small. Furthermore, the bilateral surpluses on trade in services are often largest with the countries with which France has the largest deficits on trade in goods.

Nearly half of France’s trade consists of transactions with euro area countries. There are few countries with which France trades in a wide range of goods and services. They are usually close neighbours.

Income also plays a significant role in the current account. It stems in particular from the profits earned on the international activity of French groups, income from financial investments and, in the opposite direction, interest payments on debts towards non‑residents. After rising from 2008 to 2011,

C0-4 Geographical structure of the balance of trade in goods and services in 2013

(Main countries)

(EUR billions)

-35

-25

-15

-5

-10

-20

-30

5

0

10

15

DE Spain BelgiumItaly NL EA PL CH

China Russia IndiaGB Non EUUS Japan Brazil

GoodsServices

DE: GermanyUS: United StatesGB: United KingdomNL: Netherlands

PL: PolandCH: SwitzerlandEU : European Union

EA: Euro area

Note: By country of origin of goods. Source: Banque de France.

T0-3 Geographical structure of trade in goods and services

(%)

Goodsa) Servicesa)

Germany 15.1 12.6Belgium 8.0 6.5

Netherlands 4.3 5.2

Italy 7.3 5.0Spain 6.3 4.9

Euro area 46.0 42.4United Kingdom 5.5 10.8

European Union 57.5 57.8United States 6.0 10.9Switzerland 2.4 6.0

China 6.0 2.1

Japan 1.5 1.1

Brazil 0.8 0.8

Russia 2.1 0.9India 0.8 0.8

World 100.0 100.0

a) Exports + imports.Source: Banque de France.



OVERVIEWGeographical structure of France’s trade

Value Less than 5 billion70 to 100 billion

5 to 10 billionMore than 100 billion

10 to 40 billionFrance

40 to 70 billion

Note: Sum of imports and exports of goods and services by country.Source: Banque de France.

the primary and secondary income balance3 fell sharply in 2012. After showing an aggregate surplus in 2011, the balance was slightly negative in 2012 and the deficit was even a bit deeper in 2013.

This deficit stems from the decline in holdings of debt securities issued by non‑residents and smaller returns, as well as an increase in external debt. France’s financial sector has largely divested itself of foreign high‑yield bonds. Furthermore, the increase

in external debt, incurred mainly by the government sector, has increased the interest payable, even though this increase has been tempered by falling long‑term yields.

C0-5 Primary and secondary income

(EUR billions)

-80

-60

-40

-20

0

20

40

80

2008 2009 2010 2011 2012 2013

60

Direct investment incomeCompensation of employeesOther primary and secondary income (private sector)General government primary and secondary incomeIncome from other investment and reserve assetsPortfolio investment incomeTotal primary and secondary income


C0-6 Financial account

(EUR billions)

-300

-200

-100

0

100

300

2008 2009 2010 2011 2012 2013

200

Portfolio investmentOther investment

Financial derivativesReserve assets

Direct investment

Financial Account


3 Primary income covers compensation derived directly from a production activity, which is why it is called “primary”, from working (wages) and from capital invested (investment income). Secondary income covers distribution transactions that are not related to means of production (non-production related taxes, social benefits, etc.).



OVERVIEW On the other hand, the balances on compensation of employees (primarily for border workers), income from direct investment and “other investment” (loan‑deposit position) have improved slightly since 2008.

The current account deficit is financed by capital inflows measured in the financial account.

The financial account balance since 2008 shows that:

• the largest flows were in portfolio investment and “other investment” (loan‑deposit position);

• net direct investment flows reached a historic low in 2013.

Since 2008, portfolio investment, which covers securities transactions (bonds and short‑term securities), has been a key source of capital inflows. Its counterpart, “other investment”, which consists primarily of the loan‑deposit position, has shown a net asset position since 2009.

In 2013 the downward trend in outward direct investment seen since 2009 continued. This decline largely explains the unusual situation where the direct investment balance shows a net inflow in 2013, instead of an outflow.

Equity capital transactions in other countries, including real estate investment, resulted in a net capital inflow of 1.5 billion,4 which means that disposals of foreign assets were greater than new investment and capital contributions to non‑resident subsidiaries.

Inward direct investment also declined, but to a lesser degree, standing at 13 billion, after consolidating

cross‑border intercompany transactions. Real estate investment accounts for 5 billion of this total.

France’s net international investment position, which represents France’s net assets or liabilities vis‑à‑vis other countries, showed a larger net foreign liability of 351 billion,5 or 16.6% of GDP, compared to a net foreign liability of 236 billion or 11.3% of GDP in 2012.

The international investment position records net cumulative investment flows, but also valuation effects (changes in the euro exchange rate, changes in the market value of bonds and changes in share prices). The deterioration of the French international invest‑ment position, which slid by 115 billion between 2012 and 2013, stems primarily from the increase in the general government sector’s external debt and changes in exchange rates, including reserve assets.

Direct investment, which represents strategic equity interests in enterprises, showed a net foreign asset position: outward direct investment exceeded inward direct investment by 389 billion in 2013. Except for the reserve assets managed by the Banque de France, which posted a structural net foreign asset position

C0-7 Direct investment flows according to the extended directional principle

(EUR billions)

-30

0

30

60

90

2008 2009 2010 2011 2012 2013

Net direct investment outflowNet direct investment inflowNet direct investment balance


4 Under the extended directional principle – see Glossary: this valuation offsets cross-border debit and credit flows within the same group.

5 Measurement in “mixed value”: under this measure, listed equities are valued at their market value and unlisted equities are recognised at their book value. This is the benchmark used in the European scoreboard for the excessive imbalance surveillance procedure.

T0-4 France’s international investmenta)

(EUR billions)

2012 2013

Direct investment 427 389Abroad 966 971In France 539 582

Portfolio investment -621 -725Assets (residents’ transactions in securities issued by non-residents)

1,991

2,095

Liabilities (non-residents’ transactions in securities issued by residents)

2,612

2,820

Financial derivatives -45 -65Other investment -137 -55Reserve assets 140 105Net international investment position -236 -351

as % of GDP -11.3 -16.6Net external debtb) 681 690

as % of GDP 32.6 32.6

a) Mixed value – see Note 5 and Glossary.b) Net external debt is the sum of “debt instruments” in each of the main items in the table above (the other types of instruments include equities, gold, foreign currency, SDRs and financial derivatives).Source: Banque de France.



OVERVIEWof 105 billion in 2013, the other international invest‑ment position components showed a net liability.

The net liability on securities and on loans and deposits deepened. Over the long term, this change has resulted mainly from periodic sales of debt securities to foreign investors, since domestic borrowing requirements exceed domestic savings.

Net external debt measures debt financing provided for the economy by non‑residents (money market securities, bonds and loans and deposits). It stood at 32.6% of GDP in 2012 and in 2013.

France’s net liability position stems from non‑residents’ ownership of more than 1,000 billion in French government securities. This is offset only partially by the net foreign assets of other sectors (619 billion) and those of the Banque de France (116 billion). The banking sector’s international investment position is in balance.

The ratio of the net international investment position to GDP was revised upward by 3.3 points

for 2011, 2012 and 2013, as a result of the new international and European standards and improved statistical data collection.

France’s international investment position, with a net foreign liability equal to 16.6% of GDP, was still well below the 35% threshold set by the European Commission for all Member States. Market fluctuations influence the annual change in the position, but this influence is usually fleeting. However, the underlying trend is a growing net foreign liability stemming from the persistent current account deficit.

T0-5 Net international investment position in 2013 by major economic sectors

(EUR billions)

Net position -351Banque de France 116General government -1,085

Banks 0Other sectors 619


Chapter 1 Current aCCount



CHAPTER 1 current account

F rance’s current account showed a deficit of EUR 30.3 billion in 2013, equivalent to 1.4% of GDP, following a current account deficit

of 31.8 billion that was equivalent to 1.5% of GDP in 2012.1 Changes in the current account balance stem from two opposing developments that are explained in detail in the rest of this chapter:

• a 12.1‑billion reduction in the deficit on trade in goods;

• a 6.4‑billion decrease in the surplus on trade in services and a 1.4‑billion drop in the primary income surplus, along with a 2.7‑billion increase in the secondary income deficit.

1| Goods

Trade in goods includes merchandise transactions and merchanting. Merchandise transactions include customs transactions, adjusted for transactions that do not give rise to payment,2 goods procured in ports by carriers and transactions related to the coordinated production of Airbus (Box 3). In 2013, the deficit on

T1‑1 Current account

(EUR billions)

2012 2013

Receipts Payments Balance Receipts Payments Balance

Current account 794.6 826.4 ‑31.8 796.5 826.7 ‑30.3Goods 435.9 490.6 ‑54.6 437.3 479.9 ‑42.5Services 184.0 159.2 24.7 192.0 173.7 18.3

Goods and services 619.9 649.8 ‑29.9 629.3 653.5 ‑24.2

Primary income 163.3 122.6 40.7 155.0 115.7 39.3Secondary income 11.4 54.0 ‑42.6 12.2 57.5 ‑45.3

Note: Rounding differences mean that aggregate totals may not be exactly equal to the sum of their components.Source: Banque de France.

C1‑1 Current account Gross balances

C1‑2 Global export market shares

(EUR billions) (%)

-80

-60

-40

-20

0

20

40

60

80

2008 2009 2010 2011 2012 2013

Current accountGoodsServices

Primary incomeSecondary income

0

2

4

6

8

10

2008 2009 20112010 2012 2013

FranceGermany

ItalySpain

Source: Banque de France. Source: International Monetary Fund (IMF); calculations by Banque de France.

trade in goods shrank substantially as a result of a fall in imports.

1|1 General merchandise3

The value of France’s exports in constant euro declined by 1.4% in 2013, while the value of its imports fell by 2.3%.4 These declines are in contrast to the 3.1% rise in exports and the 1.2% increase in imports in 2012.

The newfound equilibrium of France’s balance of trade on goods stems largely from a 6.9% decrease in payments for energy (Table T1‑2). The deficit on trade in “other manufactured goods”, covering textiles, wood, chemicals, pharmaceuticals, metals and miscellaneous manufactured goods, shrank by 3.1 billion, following a 2.6% decrease in imports. The surplus on trade in the agricultural sector was virtually unchanged at 11.4 billion.

1 Based on the 2010‑base GDP published by Insee on 15 May 2014.2 For example, an intragroup transaction.3 Excluding goods procured in ports by carriers.4 Customs data, FOB, i.e. excluding insurance and freight costs.




This sector saw parallel increases in exports, which were up by 3.2%, and imports, which increased by 4.1%.

On the other hand, the mechanical, electrical, electronic and IT equipment sectors made a negative contribution to the balance of trade, with a 2.9% decrease in exports and a 1.3% reduction of imports.

France’s trade deficit stems primarily from its transactions with its euro area partners, with which it posted a 41‑billion deficit in 2013. Its deficit on trade with Germany stood at 16.3 billion (Chart C1‑3).5 However, its balance of trade with the euro area improved, with a 2.6 billion decrease in the deficit in 2013, as imports declined by more than exports.

France’s trade with Asian countries also showed a large deficit of 22.2 billion, with China and Hong Kong accounting for 21.8 billion. As in the case of the euro area, imports shrank more than exports, leading to a 1.0‑billion improvement in the balance of trade.

France’s trade deficits with the United States and with the new Member States of the European Union were relatively stable. Its trade surplus with the United Kingdom increased slightly. More detailed data are available in Statistical Table 1.2 in the supplement to the Annual Report on the Banque de France website.

T1‑2 Total trade in goods and trade in goods by sector

(EUR billions)

Exports Imports Balance

Amount in 2013

Change 2013/2012

(in %)

Amount in 2013

Change 2013/2012

(in %)

Amount in 2013

Change2013/2012

(EUR billions)

Trade in goods CIF‑FOBa) 427.5 ‑1.4 506.7 ‑2.2 ‑79.2 5.1of which: Agriculture and agri‑food 60.1 3.2 48.7 4.1 11.4 ‑0.1

Energy products 21.4 ‑12.9 87.3 ‑6.9 ‑65.8 3.3Mechanical, electrical and computer equipment

80.4

‑2.9

100.5

‑1.3

‑20.2

‑1.1

Transport equipment 92.4 ‑0.7 76.4 ‑0.4 16.0 ‑0.3Other manufactured goods 169.5 ‑1.1 190.3 ‑2.6 ‑20.8 3.1

a) Excluding military equipment.Note: Rounding differences mean that aggregate totals may not be exactly equal to the sum of their components.Source: DG of Customs and Excise, estimated data; calculations by Banque de France.

Box 3

Trade in goods: from customs data to balance of payments data

Trade in goods is primarily measured on the basis of customs data on transactions in merchandise and Banque de France surveys on merchanting. These data are generally published CIF‑FOB, which means that imports include the cost of insurance and freight, while exports are measured at their value when they cross the border (free‑on‑board). However, the international standards require the balance of trade on goods to be presented FOB‑FOB. For this purpose, the cost of insurance and freight to the French border are subtracted from the value of imports and reclassified as payments for services. Transactions where no payment is made, which are nearly always intragroup transactions, are then subtracted so that trade in goods records only flows that correspond to actual changes in economic ownership. Then goods procured in ports by carriers are added. Finally, merchanting is included.

Trade in goods in 2013

(EUR billions)

Receipts Payments Balance

Goods 437.3 479.8 ‑42.5Merchandise 415.7 479.8 ‑64.1

Customs data 435.6 496.8 ‑61.2Net errors and omissions ‑22.7 ‑22.3 ‑0.5Goods procured in ports by carriers

2.8

5.2

‑2.4

Merchanting 21.6 – 21.6


5 These data are presented by country of origin and not by the last country the goods passed through on their way to France.




21.6 billion in 2013, up from 17.8 billion in 2012 (see the tables for 2013 and 2012 on pages 38 to 41 for more details). This is the main positive contribution to the balance of trade in goods. Merchanting transactions are carried out by major trading, energy and agri‑food companies. They are also the result of growing intercompany transactions. The latter transactions involve intermediate goods, industrial components, spare parts, etc. and have grown with the development of global production chains.

2| services

France’s trade in services continued to show a large surplus, although it shrank from 24.7 billion in 2012 to18.3 billion in 2013 (Table T1‑3). This was similar to the surplus recorded in 2010. The smaller surplus is primarily due to charges for the use of intellectual property (–2.1 billion), telecommunications, computer and information services (–1.6 billion) and transport services (–1.4 billion).

2|1 Transport services

The deficit on trade in transport services stood at 1.7 billion in 2013, compared to 0.3 billion in 2012. This change stems from a smaller surplus on sea transport and a larger deficit on air transport.

Box 4

Trade in goods: market shares

France’s share of export markets is shrinking, against the backdrop of waning market shares for the industrialised countries as a whole, while emerging countries’ shares of global markets are growing. On average, OECD countries lost 2.1% of their market shares each year from 2006 to the beginning of 2013, while the shares of non‑OECD countries increased by 3.7%. The leading countries saw different developments in their market shares: the United Kingdom’s share shrank by 6%, France’s by 4.1%, Spain’s by 1.5%, Germany’s by 2.7% and the United States’ by 0.3%. France started losing market shares more rapidly than the leading euro area countries after 2000, but this trend started to ease in 2007.

C1‑3 Geographical structure of trade in goods

(EUR billions)

Germany

Spain

United Kingdom

United States

Japan

Italy

Other euro area countries

New EU Member States

Americas excluding the United States

China and Hong Kong

Other Asian countries

Middle East

ExportsImports

0 20 40 60 80 100

Source: DG of Customs and Excise; calculations by Banque de France.

T1‑3 Services

(EUR billions)

2012 2013

Receipts Payments Balance Receipts Payments Balance

Services 184.0 159.2 24.7 192.0 173.7 18.3Transport services 37.6 37.9 ‑0.3 37.1 38.8 ‑1.7Travel 41.8 31.1 10.7 42.7 32.3 10.4

Other servicesa) 104.6 90.3 14.4 112.2 102.6 9.6

a) See Statistical Table 1.6 “Other services” on the Banque de France website for more details.Note: Rounding differences mean that aggregate totals may not be exactly equal to the sum of their components.Source: Banque de France.

1|2 Goods procured in ports by carriers and merchanting

The deficit on goods procured in ports by carriers shrank slightly to 2.4 billion as a result of a slight increase in exports and a decline in imports. Merchanting transactions produced a surplus of




The surplus on sea transport shrank by 0.4 billion. This decline stems mainly from freight and other transport expenses (harbour services, chartering, etc.).

The deficit on air transport increased by 1.1 billion to 1.7 billion in 2013 as a result of an 8% decline in receipts, particularly for passenger transport. Air‑freight and airport services also posted a larger deficit.

Road transport posted a deficit of 3.5 billion in 2013, with a 4‑billion deficit on freight transport.

The surplus on space transport persisted, but was smaller at 0.9 billion in 2013. After remaining stable in 2011 and 2012, the balance on rail transport showed a 0.2‑billion surplus in 2013.

2|2 Travel

The travel surplus decreased by 0.3 billion, after posting virtually steady growth since 2010. The surplus stood at 10.4 billion in 2013 (Table T1‑3 and Chart C1‑5). The smaller surplus stems from a 4% increase in spending by French residents abroad, which outstripped the 2% increase in spending by foreign visitors in France.

Residents’ spending abroad posted strong growth again, particularly in countries outside the euro area. French residents’ spending in the United Kingdom grew by 7%, after declining in 2012. Their spending in the United States and Switzerland continued the rising trend seen since 2010. French residents’ spending in the

C1‑6 Travel receipts

(EUR billions)

From euro area countries From non‑euro area countries

0

1

2

3

4

6

5

8

7

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

NetherlandsItaly

Other euro area countriesSpainBelgiumGermany United Kingdom

Switzerland AfricaAsia and OceaniaEurope

(excluding the euro area, the United Kingdom and Switzerland)

Americas

0

1

2

3

4

5

6

7

2004 2005 2006 2007 2008 2009 2010 2011 20132012


C1‑5 Travel

(EUR billions)

2001 2003 2005 2007 2009 2011 20130

10

15

20

30

25

35

45

Spending by foreign visitors in FranceSpending by French residents abroadBalance

40

5


C1‑4 Transport services

(EUR billions)

ReceiptsPayments

0 2 4 6 8 10 12 14

Sea transport

Air transport

Road transport

Other transporta)

Space transport

Rail transport

a) Inland waterways, pipelines, mail, etc.Source: Banque de France.




countries south of the Mediterranean (Algeria, Egypt, Morocco, Tunisia, Turkey) was stable, after declining in 2012.

In the euro area, French residents’ spending declined by 8% in Spain, which remains the leading destination for French tourists. This decline was more than offset by the 11% rise in spending in Germany, the 3% rise in Belgium and the 1% rise in Italy.

The long‑term rising trend in foreign visitors’ spending in France stalled after the financial crisis of 2007 and 2008. Growth resumed in 2011, gained strength in 2012 and was even higher in 2013: foreign visitors’ spending is estimated at 42.7 billion, which is a historical record. In line with the trend seen since 2010, German visitors continued to increase their spending in France, which was up by 10% (Chart C1‑6). The pattern was the same for Belgian and Dutch visitors, whereas Italian and Spanish visitors reduced their spending.

Spending by visitors from the United Kingdom, France’s leading source of travel receipts outside of the euro area, was up by 7%, while visitors from Switzerland (second largest source of travel receipts) increased their spending by 1%. Spending by other European visitors from outside the euro area grew even more rapidly, rising by 24%. On the other hand, visitors from the Americas reduced their spending by 4%, and visitors from Asia and Oceania spent 5% less in France. Travel receipts from Africa were stable.6

2|3 “Other services”

The “other services” item mainly covers other business services (research and development services, professional and management consulting services, technical, trade‑related and other business services). The surplus on trade in these services shrank sharply from 14.4 billion in 2012 to 9.6 billion in 2013. Imports rose by nearly 14%, outstripping exports, which grew by 7%.

More specifically, the surplus was reduced by charges for the use of intellectual property (–2.1 billion) and telecommunications, computer and information services (–1.6 billion). The smaller surplus on charges for the use of intellectual property stems in part from the expiry of pharmaceutical patents and licences that have not been offset by new inventions.

3| primary income

Primary income covers compensation for means of production, labour (compensation of employees) and capital (investment income). In 2013 and 2012, the primary income surplus stood at nearly 40 billion (Table T1‑4). Direct investment income makes a key contribution to the primary income surplus.

C1‑7 Other services

(EUR billions)

0 10 20 30 40 50 60

Manufacturing serviceson physical inputs owned

by others

Maintenanceand repair services n.i.e.

Construction

Insuranceand pension services

Financial services

Charges for the useof intellectual property n.i.e.

Telecommunication, computerand information services

Other business servicesb)

Personal, culturaland recreational services

Government services n.i.e.a)

PaymentsReceipts

a) n.i.e.: not included elsewhere.b) Research and development services, professional and management consulting services, technical, trade‑related and other business services.Source: Banque de France.

T1‑4 Primary income

(EUR billions)

2013

Balance

Compensation of employees 15.9Investment income 14.1Direct investment income 34.2

Dividends 29.4Reinvested earnings 6.6Interest on intercompany lending ‑1.7

Portfolio investment income ‑17.2of which dividends ‑8.0

Other investment income (loans and deposits) ‑3.3Reserve asset income 0.5

Other primary income 9.3Total 39.3

Note: Rounding differences mean that aggregate totals may not be exactly equal to the sum of their components.Source: Banque de France.6 See Statistical Table 1.4 in the supplement to the Annual Report available

on the Banque de France website.




3|1 Direct investment income

The estimated direct investment income surplus stood at EUR 34.2 billion in 2013, down by nearly 5 billion compared to 2012. Equity capital income posted a surplus of 35.9 billion, including 29.4 billion in dividends and 6.5 billion in reinvested earnings. This surplus was down by 5.7 billion from 2012. Interest income on intercompany lending showed a deficit of 1.7 billion, which was much smaller than the 2.6‑billion deficit in 2012.

The surplus on direct investment income from equity capital stems primarily from the fact that residents’ investment abroad is two times greater than non‑residents’ investment in France. The surplus can also be explained by the apparent return on outward direct investment in 2013, which was 2 percentage points higher than the return on inward direct investment.7 The small deficit on interest income from intercompany lending stems from the difference of some 12% between the amount of intercompany debts and claims, and a small positive difference between the average interest rates paid on debts and those received on claims.

According to the estimated data, European Union countries accounted for some 46% of France’s outward direct investment income in 2013, with other industrialised countries contributing 19% and the emerging countries 35%.8 The main sources of direct investment income are France’s leading trading partners (United Kingdom, United States, Germany), and the countries where cash management centres are located (Netherlands, Belgium, Switzerland). The main sources of direct investment income among the emerging countries are Indonesia, Russia, Brazil, Singapore, and China.

The geographical structure of income from inward direct investment in France is similar to the previous structure, but with stronger contrasts. The Netherlands, Belgium, Luxembourg and Switzerland receive a total of 54% of the direct investment income from France, far more than Germany, the United States and the United Kingdom, which share 34%.

3|2 Portfolio investment income

The deficit on portfolio investment income was slightly smaller in 2013, standing at 17.2 billion, compared to 18.7 billion in 2012 (Table T1‑4).9 Income from equity securities and investment fund shares/units and from debt securities (mainly bonds) all contributed to the reduction in the deficit.10 Receipts and payments related to debt securities shrank, as interest rates declined in 2013.

3|3 Income from “other investment” and reserve assets

The balance on income from “other investment”, meaning the current loans and deposits, showed a

C1‑8 Investment income balance (including reinvested earnings)

(EUR billions)

-30

-20

-10

0

10

20

30

40

50

2008 2009 2010 2011 2012 2013

Direct investment income

Other investment income

Portfolio investment income

Total

Reserve asset income


C1‑9 Direct investment income

(EUR billions)

-10

0

10

20

30

40

50

60

70

2008 2009 2010 2011 2012 2013

ReceiptsPaymentsDirect investment income – net balance

Notes: Provisional results. Receipts correspond to income from outward direct investment and payments correspond to income from inward direct investment. Starting in 2012, direct investment income has included interest on intercompany lending.Source: Banque de France.

7 The apparent return on direct investment is the ratio of equity capital income for the year to the book value of direct investment in equity capital (excluding real estate) at the end of the previous year.

8 See Statistical Table 1.8 in the supplement to the Annual Report on the Banque de France website.

9 See Statistical Table 1.7 in the supplement to the Annual Report.10 The balance of equity securities and investment fund shares/units showed a

deficit of 8.0 billion in 2013, compared to 9.2 billion in 2012, the balance of debt securities showed a deficit of 9.2 billion, following a deficit of 9.5 billion in 2012.




deficit of 3.3 billion in 2013, compared to a deficit of 4.1 billion in 2012. Indeed, the balance of external debt and claims arising from “other investment” showed a smaller deficit in 2013 than in 2012. Income on reserve assets posted a surplus of 0.5 billion, under the effect of historically low interest rates.

3|4 Other primary income and compensation of employees

The surplus on compensation of employees includes resident border workers’ compensation, minus compensation that resident employers pay to non‑resident employees. The surplus was unchanged at 16 billion in 201311 (Table T1‑4). The other general government primary income covers some of France’s transactions with European institutions (Box 5).

4| secondary income

Secondary income covers distribution transactions that are not related to means of production (non‑production related taxes, social benefits, etc.).

The secondary income deficit deepened in 2013 to reach 45.3 billion (Table T1‑5). The general government sector accounts for most of the deficit. The bulk of France’s contributions to European institutions are recorded under secondary income (Table T1‑5 and Box 5).

Workers’ remittances are another major component of secondary income. These remittances are transfers that workers resident in France make to their countries of origin.

11 Employees’ income rose from 2008 to 2012, stemming primarily from changes in the exchange rate of the euro against the Swiss franc.

Box 5

Transfers with European Union institutions

The deficit on France’s transfers with the European Union institutions stood at 8.5 billion in 2013.

France’s payments into European budgets reached 23.7 billion in 2013. The payments included primary income from customs duties (1.7 billion) and secondary income (22 billion). Secondary income can be broken down as follows:

• France’s contribution of 21.2 billion to the European Union budget, including 17.1 billion calculated on the basis of gross national income (GNI), 2.8 billion from value added tax (VAT) and 1.3 billion in financial compensation paid to certain Member States (primarily the United Kingdom);

• in addition, France contributed 0.6 billion to the European Development Fund (EDF).

France’s receipts from the European Union institutions stood at 15.2 billion. Primary income records subsidies received under the common agricultural policy (CAP), which stood at 11.1 billion. Secondary income mainly covers 1 billion in payments from the European Social Fund (ESF). The capital account (2.2 billion) mainly includes 1.6 billion in assistance allocated by the European Regional Development Fund (ERDF). Finally, general government receipts stood at 0.4 billion. These receipts represent 25% of the amount of customs duties and correspond to the compensation for expenses incurred by the Member States when they collect taxes on behalf of the European Union.

Transfers with European Union institutions

(EUR billions)

2013


General government 0.4 0.4Primary income 11.1 1.7 9.4

Taxes 1.7 ‑1.7Subsidies 11.1 11.1

Secondary income 1.5 22.0 ‑20.5of which own resources 21.2 ‑21.2of which European Development Fund (EDF)

0.6

‑0.6

Capital account 2.2 2.2Total 15.2 23.7 ‑8.5

Sources: European Union and Eurostat.

T1‑5 Secondary income

(EUR billions)

2013

Balance

General government secondary income ‑30.5Social benefits ‑6.4International cooperation ‑4.2

of which operating expenses for international organisations ‑0.8European Union institutions’ own resources ‑21.2Other general government transfers 1.4

Other secondary income ‑14.8of which miscellaneous current transfers ‑12.3of which workers’ remittances ‑8.4

Total ‑45.3


Chapter 2 finanCial aCCount



CHAPTER 2 financial account

1| direct investment

“Direct investment” refers to capital investment in enterprises where the investor holds at least 10% of the equity, along with flows of funds (deposits and loans) and reinvested earnings (see glossary) between companies in such relationships.

In 2013, the direct investment item showed a net inflow of capital. It was the first inflow recorded since the 1990s.

1|1 Direct investment abroad

French direct investment abroad declined by nearly EUR 20 billion in 2013 to stand at 7 billion. This figure incorporates prior consolidation of financial flows into and out of France within each group of companies (this calculation and presentation method is called the “extended directional principle” in balance of payments terminology).

T2‑2 Direct investment flows

(EUR billions)

2012 2013

Abroad 26 7Equity capital, including real estate 35 ‑2

Reinvested earnings 11 11Other transactions (intercompany loans)

‑20

‑2

Memorandum item: Other transactions (assets)

‑8

‑9

In France 12 13Equity capital, including real estate 9 13

Reinvested earnings 3 4Other transactions (intercompany loans)

0

‑5

Memorandum item: Other transactions (liabilities)

11

‑13

Net direct investment balance 14 ‑5

Note: Flows are determined according to the extended directional principle, which is explained in the glossary.Source: Banque de France.

T2‑1 Financial account

(EUR billions)

2012 2013

Financial account ‑21 ‑14Direct investment 14 ‑5Portfolio investment ‑27 ‑70

Financial derivatives ‑14 ‑17

Other investment 2 79Reserve assets 4 ‑1


C2‑1 Direct investment flows according to the extended directional principle

(EUR billions)

Outward direct investmentInward direct investmentNet direct investment balance

-30

0

30

60

90

2008 2009 2010 2011 2012 2013


Acquisition of equity interests in foreign enterprises resulted in a negative balance of 2 billion, since disposals were greater than new investment and capital contributions to pre‑existing subsidiaries.

However, the balance in the real estate sector was positive, with net outward investment of slightly more than 4 billion. The situation in other sectors was one of contrasts, with net outflows in mining industries, wholesale and retail trade and telecommunications, and net inflows in the other sectors – in larger amounts, since the aggregate investment balance was negative. One‑off equity transactions concern different business areas, depending on the years. Therefore, we should not read too much into the year‑to‑year variations in a specific sector.

The amount of foreign subsidiaries’ earnings that is retained and reinvested abroad was stable at 11 billion.

Finally, French groups’ claims on their foreign subsidiaries were down by nearly 2 billion.

Two geographical areas accounted for all French direct investment abroad in 2013:

• the euro area countries, for 13 billion;• emerging and developing countries (6 billion).

On the other hand, the European Union countries outside of the euro area saw net disposals of French direct investment equal to 1 billion and, more significantly, the other industrialised countries saw net disposals of French direct investment equal to 11 billion.




C2‑2 Outward direct investment flows C2‑3 Inward direct investment flows

(EUR billions) (EUR billions)

-50

0

50

100

2008 2009 2010 2011 2012 2013

Equity capital, including real estateReinvested earningsIntercompany loans and trade creditsTotal

0

-10

20

10

30

Equity capital, including real estateReinvested earningsIntercompany loans and trade creditsTotal

2008 2009 2010 2011 2012 2013

Note: The data for 2013 are provisional.Source: Banque de France.

Note: The data for 2013 are provisional.Source: Banque de France.

1 The structure of French direct investment abroad by geographical area and by sector from 2010 to 2013 is available in the statistical appendix to this report on the Banque de France website.

2 See glossary.

The leading destinations for French direct investment abroad were Belgium (nearly 11 billion, largely due to intercompany cash transfers to Belgium), Spain (3 billion), Russia and Norway (2 billion each), along with Brazil (1 billion). On the other hand, disposals of direct investment interests were largest in the Netherlands (2 billion), the United States (10 billion) and Switzerland (1 billion).1

1|2 Direct investment in France

Foreign direct investment in France was unchanged in 2013, standing at 13 billion.

Equity capital transactions, at 13 billion, were up from the very low figure of 9 billion in 2012.

The sector attracting the most direct investment in 2013 was real estate (5 billion), as was the case in previous years. It was followed by the finance and insurance sector, including holding companies (3 billion), wholesale and retail trade (2 billion) and communications.

On the other hand, foreign direct investors disposed of 3 billion in French assets in several sub‑sectors.

Reinvested earnings are usually weak because of the relatively low earnings of direct investment enterprises

in France and the large proportion that such enterprises pay out in dividends. They stood at 4 billion in 2013, up from 3 billion in 2012.

Intercompany lending showed a negative balance of 5 billion in 2013. This means that, on the whole, foreign groups were net recipients of loans or loan repayments from affiliated French companies.

2| portfolio investment

Portfolio investment2 posted a net capital inflow of 70 billion.

Non‑residents’ acquisitions of French securities increased from 25 billion in 2012 to 136 billion in 2013. French residents’ net acquisitions of foreign securities were positive at 66 billion, after being negative from 2010 to 2012.

Capital inflows primarily took the form of non‑residents’ purchases of bonds and short‑term securities. Capital outflows consisted mainly of purchases of foreign equity securities and investment fund shares/units. Non‑residents resumed their acquisitions of short‑term securities, with an increase of 28 billion. They bought 82 billion in long‑term securities and maintained their position in equity securities and investment fund shares/units. French residents made net acquisitions of 36 billion in foreign bonds and similar securities, after carrying out net disposals of 80 billion in bonds in 2012. They also sold off foreign short‑term securities. They acquired 49 billion in equity securities and investment fund shares/units.




C2‑4 Net portfolio investment flows by issuing sector

(EUR billions)

-150

-100

-50

0

50

2011 2012 2013

Monetary authorities

Other sectorsMonetary financial institutionsGeneral government


T2‑3 Portfolio investment by instrument

(EUR billions)

2012 2013

Assets Liabilities Balance Assets Liabilities Balance

Equity securities 40 20 19 31 23 8Investment fund shares/units 14 5 10 17 3 15Total equity securities and investment fund shares/units

54

25

29

49

26

23

Long‑term debt securities ‑80 37 ‑116 36 82 ‑46Short‑term debt securities 24 ‑37 61 ‑19 28 ‑47Total debt securities ‑56 0 ‑56 17 110 ‑93Total ‑2 25 ‑27 66 136 ‑70

Note: Assets: net flows of residents’ purchases of securities issued by non‑residents. Liabilities: net flows of non‑residents’ purchases of securities issued by residents.Source: Banque de France.

T2‑4 Portfolio investment by issuing sector

(EUR billions)

2012 2013

Assets ‑2 66Monetary authorities 1 1General government ‑66 28Monetary financial institutions 22 ‑15Other sectorsa) 42 53Liabilities 25 136General government 18 81Monetary financial institutions ‑8 14Other sectors 14 41Balance ‑27 ‑70Monetary authorities 1 1General government ‑84 ‑53Monetary financial institutions 29 ‑29Other sectors 27 12

a) Non‑financial corporations, non‑monetary financial intermediaries (other financial intermediaries and investment funds other than money market funds), insurance companies.Source: Banque de France.

C2‑5 Non‑residents’ net purchases of French securities by issuing sector

(EUR billions)

Other sectorsMonetary financial institutionsGeneral government

-50

0

50

100

150

200

250

300

350

2008 2009 2010 2011 2012 2013

Total liabilities

Note: The inclusion of Société de financement de l’économie française (SFEF) in the “other sectors” category, in accordance with the statistical classification, does not fully reflect the economic reality of the situation; this entity’s issuance should actually be classified with that of MFIs.Source: Banque de France.

Two sectors accounted for virtually all of the net liability resulting from the balance of aggregate foreign portfolio investment in France and French portfolio investment abroad: general government received 53 billion out of 70 billion and the rest went to monetary financial institutions (primarily credit institutions and money market funds).

2|1 Liabilities (non‑residents’ transactions in securities issued by residents)

Non‑residents’ net acquisit ions of French government securities generated a capital inflow of EUR 81 billion in 2013, compared to an inflow of 18 billion in 2012. Foreign investment in securities issued by resident monetary financial institutions generated an inflow of 14 billion and investment in securities issued by other sectors generated an inflow of 41 billion (Table T2‑4).




C2‑6 Residents’ net purchases of securities issued by non‑residents by residence of the issuer

(EUR billions)

-200

-150

-100

-50

0

50

100

150

2008 2009 2010 2011 2012 2013

Issuers outside the euro areaEuro area issuersBalance


C2‑7 Residents’ net purchases of securities issued by non‑residents by investor’s sector

(EUR billions)

Other sectorsMonetary financial institutions

2008 2009 2010 2011 2012 2013

Balance

-200

-150

-100

-50

0

50

100

150


T2‑5 Assets (residents’ transactions in securities issued by non‑residents) by geographical area and by resident investor’s sector

(EUR billions)

2012 2013

Euro area issuers ‑26 40Monetary financial institutions 2 ‑21Other sectorsa) ‑28 60Issuers outside the euro area 25 27Monetary financial institutions ‑9 9Other sectorsa) 33 18All issuers ‑2 66Monetary financial institutions ‑7 ‑12Other sectorsa) 5 78

a) Including general government and monetary authorities.Source: Banque de France.

2|2 Assets (residents’ portfolio investment in securities issued by non‑residents)

Residents’ acquisitions of foreign government securities resumed, standing at 28 billion, and residents’ acquisitions of foreign securities issued by other sectors stood at 53 billion, with non‑financial corporate securities making up the bulk of the acquisitions, particularly from the euro area. Residents continued to sell off securities issued by foreign monetary financial institutions, with disposals of 15 billion (Tables T2‑4 and T2‑5).

3| financial derivatives

Transactions in financial derivatives produced a net inflow of 17 billion in 2013, compared to a net inflow of 14 billion in 2012.

In 2013, the net balance on options showed an inflow of 18 billion, whereas transactions in swaps and futures generated small outflows.

Transactions in financial derivatives with counterparties that are euro area residents resulted in a net inflow of 20 billion and those with counterparties outside of the euro area resulted in a net outflow of 4 billion. The three largest balances were with the Netherlands, Luxembourg and Germany.

4| other investment (loan‑deposit position)

C2‑8 Other investment – loan‑deposit positions of all resident sectors (including MFIs)

(cumulative flows, EUR billions)

-600

-400

200

400

600

2008 2009 2010 2011 2012 2013

Loans all sectors MFIs’ loans (except BdF)Deposits all sectors MFIs’ deposits (except BdF)Balance all sectors MFIs’ balance (except BdF)

0

-200





T2‑6 Other investment (loan‑deposit position)

(EUR billions)

2012 2013

Other investment 2 79Assets ‑46 ‑4Liabilities ‑48 ‑83

Banque de France 5 44Assets 4 ‑21Liabilities ‑1 ‑66

of which liabilities towards the ESCB (TARGET)

‑23

‑39

General government 4 11Assets 31 13Liabilities 27 2

Monetary financial institutions ‑46 30Assets ‑113 22

Euro ‑42 ‑64Foreign currencies ‑71 86

Liabilities ‑66 ‑8Euro ‑103 ‑46Foreign currencies 37 38

Other sectors 39 ‑7Assets 32 ‑19

Financial sectora) ‑9 ‑2Non‑financial sectorb) 41 ‑17

Liabilities ‑7 ‑12Financial sectora) 0 ‑20Non‑financial sectorb) ‑8 8

a) Non‑monetary financial intermediaries: other financial intermediaries, investment funds other than money market funds, insurance companies, clearing houses, pension funds.b) Non‑financial corporations, households and non‑profit institutions serving households (NPISHs).Note: Rounding differences mean that aggregate totals may not be exactly equal to the sum of their components.Source: Banque de France.

C2‑9 MFIs’ interbank loans

(flows in EUR billions)

-150

0

100

150

2012 20132008 2009 2010

-100

2011

50

-50

Counterparties outside the euro area (in euro)Counterparties outside the euro area (in foreign currencies) Euro area counterparties (in euro)Euro area counterparties (in foreign currencies)Balance


3 See the Banque de France 2013 financial statements at: https://www.banque‑france.fr/fileadmin/user_upload/banque_de_france/publications/AR2013_chap6.pdf

The loan‑deposit position with non‑residents across all sectors was virtually in balance in 2012. In 2013, it showed a net capital outflow of 79 billion. Most of the outflow resulted from a further decrease of 83 billion in liabilities, which was greater than the reduction in 2012.

4|1 Loan‑deposit position of monetary financial institutions (MFIs)

MFIs (credit institutions and money market funds) accounted for capital outflows of 30 billion, compared to inflows of 47 billion in 2012, mostly as a result of a resumption in their cross‑border lending.

The largest flows concerned short‑term transactions.

The increase in interbank assets was the result of contrasting developments in euro and foreign currency transactions (Chart C2‑9). Assets denominated in euro shrank by 58 billion, with transactions with non‑euro area

counterparties, especially in the United Kingdom, accounting for three quarters of the decrease. On the other hand, foreign currency assets increased by 65 billion. Most of the increase stemmed from lending denominated in US dollars. Virtually all of the borrowers were non‑euro area residents, from the United States in particular. The decrease in interbank liabilities also stems from a decrease in euro‑denominated liabilities and an increase in those denominated in foreign currencies.

4|2 Loan‑deposit position of sectors other than MFIs

The general government sector generated capital outflows of 11 billion. More than half of the outflows stemmed from France’s continued contributions to the capital of the new European Stability Mechanism. In contrast to previous years, the position of other sectors, meaning non‑financial corporations and insurance companies, was negative, with a net inflow of 6 billion. The loan‑deposit position of the Banque de France3 showed a net outflow of 44 billion, stemming from a reduction of its liabilities to the European System of Central Banks (ESCB).

https://www.banque-france.fr/fileadmin/user_upload/banque_de_france/publications/RA2013-BDF.pdf

https://www.banque-france.fr/fileadmin/user_upload/banque_de_france/publications/RA2013-BDF.pdf

https://www.banque-france.fr/fileadmin/user_upload/banque_de_france/publications/AR2013_Chap6.pdf

Chapter 3 international investment position



CHAPTER 3 international

investment position

C3‑1 Net international investment position

(EUR billions)

-800

-600

-400

-200

0

400

200

600

2008 2009 2010 2011 2012 2013

Net international investment positionDirect investment (mixed value)Portfolio investmentOther investment


T3‑1 France’s international investment position from the end of 2012 to the end of 2013 (direct investment estimated at mixed value)

(EUR billions)

Stocks end 2012

Balance of payments

flows in 2013a)

Changes attributable to changes in exchange rates, market prices

and other adjustmentsa)

Total variations between end 2011 and end 2012a)

Stocks end 2013

Total Changes in exchange

rates

Changes in market

prices

Other adjustments

1 2 3 4 = (2 + 3) 5 = (1 + 4)Direct investment 427 ‑5 ‑34 ‑30 ‑5 2 ‑39 389Portfolio investment ‑621 ‑70 ‑34 ‑16 13 ‑31 ‑104 ‑725

Financial derivatives ‑45 ‑17 ‑3 2 ‑5 0 ‑20 ‑65

Loan‑deposit position ‑137 79 3 2 0 2 82 ‑55Reserve assets 140 ‑1 ‑33 ‑33 0 0 ‑35 105

Balance -236 -14 -101 -76 3 -27 -115 -351Gross external debt 4,075 14 ‑65 ‑56 ‑30 21 ‑51 4,024Net external debt 681 18 ‑9 4 ‑33 20 9 690

a) Position by sign: No sign means an increase in assets or a decrease in liabilities; (-) sign means a decrease in assets or an increase in liabilities.Note: Rounding differences mean that aggregate totals may not be exactly equal to the sum of their components.Source: Banque de France.

T3‑2 The French international investment position from the end of 2012 to the end of 2013

EUR billions % of GDP

Net position end 2012 -236 -11.3Changes attributable to flows ‑14 ‑0.7Changes attributable to changes in financial markets and other adjustments

‑100

‑4.8

Changes in exchange rates -77 -3.6Changes in market prices 3 0.1Other adjustments -26 -1.3

Net position end 2013 -351 -16.6

Note: International investment position with direct investment in mixed value.Source: Banque de France.

1 See glossary for the definitions of the different valuation methods. The market value is consistent with the national accounts methodology. The book value is used for geographical and sectoral analysis of direct investment. The mixed-value method is the most widely used in the European Union. It makes it possible to compare countries’ international investment positions. It is used for the macroeconomic imbalance indicators and the ECB uses it for the euro area international investment position. For the purpose of international comparisons, direct investment is recorded in mixed value in the international investment position.

T he international investment position represents the nation’s net assets or liabilities vis‑à‑vis the rest of the world. The balance of payments

records annual flows, while the international investment position records stocks.

France’s net international investment position at the end of 2012 was negative, showing a 236‑billion net liability,1 which means that the value of foreign financial assets held by residents was less than the value of liabilities (debts and other financial obligations) towards non‑residents.

In 2013, the value of non‑residents’ acquisitions of French securities, particularly bonds, was greater than the value of foreign securities acquired by French residents (see Chapter 2). At the same time, loan and deposit transactions resulted in a significant reduction of liabilities towards non‑residents. The cumulative flows of direct investment, transactions in securities and financial

derivatives, and loan and deposit transactions with non‑residents increased the net foreign liability on the international investment position by 14 billion.

When adjusted for price and exchange‑rate effects, France’s international investment position becomes even more negative, with the net foreign liability increasing from 236 billion to 351 billion, which is equivalent to 16.6% of GDP.



CHAPTER 3 international investment position

C3‑2 Stocks of direct investment abroad (at book value)

(EUR billions)

0

200

400

600

800

1,000

Equity capitalIntercompany loans and trade credits

2008 20132009 2010 2011 2012

Note: The stocks of intercompany lending are calculated after restating the lending between fellow companies according to the extended directional principle. The stocks have included trade credits between affiliated companies since the end of 2011.Source: Banque de France.

T3‑3 Stocks of direct investment stated according to the extended directional principle (at market value)

(EUR billions)

2012 2013

Abroad 958 1,120Equity capital 910 1,075Other transactions (intercompany loans) 48 45

In France 541 634Equity capital 464 562Other transactions (intercompany loans) 77 72

Net direct investment position 417 486

Note: See the glossary for the extended directional principle; according to this principle, intercompany lending within the same international group is not classified according to the direction of the lending, but according to the country of residence of the parent company of the group. This method substantially reduces the aggregate volume of flows and stocks of French direct investment abroad and foreign direct investment in France, without affecting the aggregate balance.Source: Banque de France.

2 See glossary.3 This means that unlisted securities are estimated at book value.4 When the preliminary international investment position figures for the end

of 2013 were being compiled in April and May 2014, the survey data on stocks of direct investment in equity capital at the end of 2013 were not yet available. Therefore, stocks of direct investment at book value at the end of 2013 published here are estimated on the basis of stocks at the end of 2012, direct investment flows in 2013 and exchange rate variations for positions in foreign currencies. Stocks of direct investment at market value at the end of 2013 are based on the estimated stocks at book value, adjusted for changes in market capitalisation.

5 Book value is used to present geographic and sectoral distributions, since it can be derived directly from the data collected. This makes fine-grained analysis possible. Mixed values and market values are based on estimates of aggregate figures and are not broken down in finer detail.

When all direct investment is estimated at its market value, including unlisted securities,2 the adjustment of France’s net international investment position is less severe and the net liability stands at 253 billion at the end of 2013, compared to 246 billion at the end of 2012. This is because the negative impact of exchange rate variations is offset by the positive contribution from rising prices for French companies’ foreign investment.

1| direct investment

France’s net international direct investment position shows large net foreign assets because, for more than fifteen years (with the exception of 2013), outward investment flows have exceeded inward flows every year. Measured in mixed value,3 the net foreign asset position stood at 389 billion at the end of 2013, representing a decline of nearly 40 billion due to negative net flows of 5 billion in 2013 and the appreciation of the euro against most other currencies.

Expressed at market value, however, the net international direct investment position grew by nearly 70 billion to 486 billion as a result of the price and exchange‑rate effects relating to unlisted securities (Table T3‑3).

For the purposes of the detailed analyses below, the international direct investment position is measured at book value. In this case, net foreign assets stand at 411 billion, down by 30 billion compared to 2012.

1|1 Direct investment abroad

Outward direct investment stocks4 stood at 943 billion in book value5 at the end of 2013, representing a decrease of 20 billion compared to the end of 2012. Equity capital investment accounted for 95% of the total, including 4% in real estate investment. Net lending, including trade credits granted by French groups to their foreign subsidiaries, accounted for the remaining 5% of the total.

The euro area is the leading destination for outward direct investment, accounting for 47% of the stock at book value. Other leading destinations are industrialised

non‑EU countries (23%), emerging and developing countries (17%) and European Union countries outside of the euro area (13%).

The main destination countries for France’s outward direct investment are transit countries, such as Belgium (ranking 1st with 16% of the total), the Netherlands (ranking 3rd with 10% of the total) and Luxembourg (ranking 6th with 5%), as well as France’s leading traditional trading partners: the United States (ranking 2nd

with 16%), the United Kingdom (ranking 4th with 9%), followed by Germany (ranking 5th with 6%)




investment position

C3‑5 Stocks of direct investment in France (at book value and at market value)

(EUR billions)

0

250

500

750

2008 2009 2010 20132011 2012

At market valueAt book value


6 The structure of French direct investment abroad by geographical area and by sector from 2010 to 2013 is available in the statistical appendix to this report on the Banque de France website.

C3‑3 Stocks of direct investment abroad (at book value and at market value)

(EUR billions)

250

500

750

1,000

1,250

2008 2009 201320122010 2011

At market valueAt book value


C3‑4 Stocks of direct investment in France (at book value)

(EUR billions)

Equity capitalIntercompany loans and trade credits

2008 2012 20132009 2010 20110

200

400

600

800

1,000

Note: The stocks of intercompany lending are calculated after restating the lending between fellow companies according to the extended directional principle. The stocks have included trade credits between affiliated companies since the end of 2011.Source: Banque de France.

and Italy (ranking 7th with 4%). The leading destinations for outward direct investment among emerging countries are Brazil (2%), China (2%), Russia (1%) and Morocco (1%).6

The structure of France’s outward direct investment is diversified. Finance and insurance account for 27% of the total and manufacturing for 26% (including 4% for pharmaceuticals, 4% for agriculture and food, 3% for the automotive industry and 3% for chemicals). In order of importance, the leading resident investor sectors are gas and electricity (7% of total outward direct investment), information and communication (7%), wholesale and retail trade and repairs, and gas and oil extraction industries.

The market value of outward foreign direct investment stocks increased by 162 billion between the end of 2012 and the end of 2013 to stand at 1,120 billion (Chart C3‑3).

1|2 Direct investment in France

The book value of inward direct investment increased by 13 billion to stand at 532 billion at the end of 2013. Borrowing by French subsidiaries of non‑resident groups, including trade credits, made up 13% of the total and equity capital investment accounted for the remaining 87%. Real estate investment alone accounted for 19% of the total (Chart C3‑4).

The structure by the country of residence of the first counterparty shows that the leading investor countries are Belgium, the Netherlands and Luxembourg.

However, it is helpful to seek the real investor country, meaning the country of residence of the ultimate controlling parent. Box 6 provides a more detailed explanation of this method and the results found.

The market value of stocks of inward direct investment stood at 634 billion at the end of 2013, up by 93 billion compared to the end of 2012, primarily as a result of price and exchange‑rate effects (Chart C3‑5).




Box 6

Direct investment stocks in France by the country of residence of the ultimate controlling parent

In accordance with the methodological recommendations of the IMF and the OECD, the geographical structure of direct investment stocks is reported on the basis of the immediate country of origin or destination of the capital.1 This means that when an American group invests in France through a Luxembourg investment vehicle, the country of origin reported in the official statistics will be Luxembourg instead of the United States. However, this does not provide very helpful information about the actual origin of foreign investment. The OECD also recommends presenting a breakdown of inward direct investment stocks by the country of residence of the ultimate controlling parent in order to provide a clearer idea of the geographical origin of the entities that ultimately own and control resident companies. Identifying the ultimate controlling parents’ countries of residence reveals that French groups ultimately own a significant share of the stocks of inward foreign direct investment. Their share stood at 66 billion or nearly 13% of the total at the end of 2013 (see table opposite).

If we strip out France, the relative share of the United States increases the most, when inward direct investment is reclassified according to the country of residence of the ultimate controlling parent. The United States is still the leading investor in France, accounting for 21% of total foreign investment, if we exclude the investment of non‑resident subsidiaries of French groups. The next largest investors are Germany, with 15% (excluding French groups), the United Kingdom, with 13%, the Netherlands, with 9% and Luxembourg, with 8%.

1 The geographical structure of outward and inward direct investment stocks from 2010 to 2013 is shown in the statistical appendix to this Annual Report on the Banque de France website (Statistical Tables 5.6 and 5.7).

Inward direct investment stocks by the country of residence of the ultimate controlling parent(at book value)

(EUR billions)

2013(amount)

2013 (% of total excluding France)

France 66.3 –European Union (28 members) 290.2 62.3Economic and Monetary Union (17 members)

217.9

46.8

of which: Germany 70.4 15.1Belgium 28.1 6.0Spain 11.7 2.5Ireland 4.2 0.9Italy 19.6 4.2Luxembourg 39.1 8.4Netherlands 40.7 8.7

Other European Union countries 138.5 29.8of which: Denmark 4.1 0.9

Poland 0.2 0.0Czech Republic 0.1 0.0Romania 0.2 0.0United Kingdom 62.3 13.4Sweden 5.0 1.1

Other industrialised countries 150.6 32.3of which: Australia 1.6 0.3

Canada 1.4 0.3United States 98.3 21.1Japan 7.5 1.6Switzerland 39.7 8.5

Rest of the world 24.9 5.4of which: Saudi Arabia 0.5 0.1

Brazil 0.1 0.0China 2.7 0.6Hong Kong 1.6 0.3British Virgin Islands 0.1 0.0India 0.5 0.1Lebanon 2.1 0.5Qatar 1.1 0.2Russia 0.7 0.2Singapore 1.3 0.3Turkey 0.1 0.0

Total 532.0 –Total excluding France 465.6 100.0

Note: See “Definition of geographical zones” in Appendix II to this Annual Report.Source: Banque de France.

Main differences by country following identification of the country of residence of the ultimate controlling parent

(EUR billions)

-150

-100

-50

50

0

100

150

2009 2012 20132008 2010

FranceUnited StatesUnited KingdomGermany

Rest of the world

BelgiumNetherlands

Luxembourg

2011





investment position

T3‑5 Portfolio investment assets By issuing area and by investor sector

(EUR billions)

2012 2013

Euro area issuers 1,244 1,332Monetary financial institutions 313 297

Other sectorsa) 931 1,035

Issuers outside the euro area 747 763Monetary financial institutions 218 224

Other sectorsa) 529 539

All issuers 1,991 2,095Monetary financial institutions 531 521

Other sectorsa) 1,460 1,574

a) Including general government and monetary authorities.Source: Banque de France.

T3‑6 Non-resident holdings of French securities By resident issuers’ sector

(EUR billions)

2012 2013

Stocks 2,612 2,819General government 1,087 1,155

Treasury bonds (OATs) 620 715Other bonds and notes 90 92Treasury notes and bills (BTANs and BTFs)

359

327

Other short‑term debt securities 20 22

Monetary financial institutions 619 647Equity securities and mutual 54 73Fund shares/units 516 516Bonds and notes 49 58

Other sectors 906 1,017Equity securities and mutual 539 643Fund shares/units 353 360Bonds and notes 14 14


T3‑4 Structure of portfolio investment stocks vis-à-vis non-residents By type of instrument

(EUR billions)

2012 2013

Assets 1,991 2,095Equity securities and investment fund shares/units

495

598

Long‑term debt securities 1,271 1,304Short‑term debt securities 225 192

Liabilities 2,612 2,819Equity securities and investment fund shares/units

593

716

Long‑term debt securities 1,816 1,869Short‑term debt securities 203 234

Net position -621 -725


2| portfolio investment

The net portfolio investment position shows a net foreign liability because of France’s borrowing requirements. The net foreign liability stood at 725 billion, compared to 621 billion in 2012 (Table T3‑4). The 104‑billion increase in the net liability stems from an increase in the market value of the debt securities, equity securities and investment fund shares/units sold to non‑residents. The increase in the liability can be broken down into net balance of payments inflows of 70 billion, net price and exchange‑rate effects that are virtually nil, and statistical reclassifications.

2|1 Assets (residents’ portfolio investment in securities issued by non‑residents)

At the end of 2013, French residents held 2,095 billion in foreign securities, up by 104 billion from the end of 2012. The increase stems from residents’ net acquisitions of 66 billion, with positive price and exchange‑rate effects accounting for the rest of the increase.

Long‑term debt securities accounted for nearly two thirds of residents’ portfolio investment assets, equity securities and investment fund units/shares accounted for nearly a quarter and short‑term debt securities accounted for 10%. Compared to 2012, the share of residents’ portfolio investment in equity securities increased and that in long‑term debt securities decreased.

Residents’ assets are primarily made up of securities from issuers in the euro area, which account for 64% (Table T3‑5). Securities from issuers in the four leading economies of the euro area, excluding France, which are Germany, Italy, Spain and the Netherlands, account

for some 40% of the total, as they did in 2012. Outside of the euro area, French investors mainly favoured securities from the United Kingdom and the United States, which each accounted for slightly more than 8% of total assets.

2|2 Liabilities (non‑residents’ transactions in securities issued by residents)

Non‑residents’ portfolio investment in French securities, or liabilities, stood at EUR 2,819 billion at the end of 2013, compared to 2,612 billion at the end of 2012 (Table T3‑6). This 207‑billion increase stems mainly from




C3‑6 Share of OATs, BTANs and BTFs held by non-residents

(%)

50

60

70

80

90

100

2008 2009 2010 2011 2012 2013

OATsBTANs

BTFsTotal


T3‑7 Financial derivatives

(EUR billions)

Stocks at end of year Change 2013a)

2012 2013

Assets 1,080 805 -276Swaps 762 521 ‑241Options 287 249 ‑38Forwards and futures 31 34 3

Liabilities 1,125 870 -256Swaps 767 526 ‑241Options 329 311 ‑18Forwards and futures 29 33 4

Balance -45 -65 -20Swaps ‑5 ‑5 0Options ‑42 ‑62 ‑20Forwards and futures 2 1 ‑1

a) Changes: No sign means an increase in assets and in liabilities; (-) sign means a decrease in assets and in liabilities.Source: Banque de France.

7 Statistical tables 5.17 and 5.18 can be found in the statistical appendix to this Annual Report on the Banque de France website.

non‑residents’ net acquisitions of French securities, along with price and exchange‑rate effects (Statistical Table 5.2).

Non‑residents’ portfolio investment in French equity securities and investment fund shares/units increased by nearly 123 billion in 2013. Price and exchange‑rate effects accounted for nearly three quarters of this increase. The share of portfolio investment liabilities in such securities increased from 23% to 25% at the end of 2013.

Non‑residents’ holdings of French debt securities (bonds and short‑term debt securities) increased by 84 billion, primarily as a result of non‑residents’ acquisitions, which were partially offset by negative price and exchange‑rate effects.

The overall structure of portfolio investment liabilities by resident issuers’ sector was unchanged compared to 2012, with general government issues accounting for 41%, MFIs’ issues for approximately one quarter and non‑financial corporations’ issues for most of the rest.

The share of negotiable government debt securities held by non‑residents increased from 61.9% to 65.1%. The share of Treasury bills (BTFs) held by non‑residents increased from 72% to 80.7%, their share of Treasury notes (BTANs) was down slightly from 83.9% to 83%, and their share of Treasury bonds (OATs) increased from 54.8% to 59.4%.

3| financial derivatives

The net foreign liability on financial derivatives stood at 65 billion in 2013, compared to a net foreign liability of 45 billion in 2012. The 20‑billion increase in the net

foreign liability in 2013 stems primarily from negative transaction flows. Stocks of financial derivatives shrank further in 2013. Assets shrank from 1,080 billion in 2012 to 805 billion and liabilities decreased from 1,125 billion to 870 billion.

Swaps accounted for 63% of the overall market value of the outstanding assets and liabilities in financial derivatives. Options accounted for 33% and forwards and futures for 4%.

The United Kingdom is the leading counterparty country for derivative contracts (46%), accounting for most of the swap contracts, followed by the United States (15%) and Germany (13%).

4| other investment (loan‑deposit position)

At the end of 2013, the loan‑deposit position for all sectors together showed a net foreign liability of 55 billion, compared with 137 billion at the end of 2012. MFIs’ transactions, primarily those of banks, contributed greatly to reducing the net foreign liability position.

In 2013, net foreign assets in MFIs’ loan‑deposit position rose by 29 billion to 66 billion. Resident banks increased their net lending to non‑residents largely as a result of a recovery in their cross‑border interbank lending in foreign currencies, with intercompany lending accounting for a large share.7




investment position

T3‑8 Gross reserve assets

(EUR billions)

Stocks at end of year Change 2013a)

Decomposition of change in 2013

2012b) 2013 Flowsa) c) Impact of monthly revaluations and other adjustments

Foreign exchange reserves 23.0 19.8 -3.2 -1.1 -2.1of which: Securities 20.1 19.2 -0.9 0.6 -1.5

Bank deposits 2.9 0.6 -2.3 -1.7 -0.6Reserve position in the IMF 6.4 5.8 ‑0.6 ‑0.4 ‑0.2SDRs 11.1 10.3 ‑0.8 ‑0.4 ‑0.4Gold 98.8 68.2 ‑30.6 0.0 ‑30.6Other reserve assets 0.6 1.0 0.4 0.4 0.0

Gross reserve assets 139.9 105.1 -34.8 -1.5 -33.3Price of an oz of gold in the reserves 1,261.18 871.22USD/EUR rate 1.3194 1.3791SDR/EUR rate 0.8578 0.8950

a) Variations and flows: No sign means an increase in assets; (-) sign means a decrease in assets.b) Up until the end of 2011, other reserve assets were included in the reserve position in the IMF. c) Flows calculated using the exchange rate used for the balance of payments (average monthly rate).Source: Banque de France.

C3‑7 Net loan-deposit position of MFIs

(EUR billions)

End2008

End2010

End2011

End2012

End2013

Position in euro vis-à-vis the euro areaPosition in euro vis-à-vis countries outside the euro areaPosition in foreign currencies vis-à-vis the euro areaPosition in foreign currencies vis-à-vis countries outside the euro area

-240-200-160-120

-80-40

04080

160

End2009

120


8 Statistical table 5.21 in the statistical appendix to this Annual Report on the Banque de France website.

The MFIs’ position in foreign currencies showed net foreign assets of 36 billion, following a net foreign liability of 14 billion at the end of 2012. This change corresponds to capital outflows of 48 billion in the balance of payments. On the other hand, net foreign assets denominated in euro were down by 21 billion because of the decline in interbank lending, particularly with banks in the United Kingdom.

An analysis of the countries of residence of loan and deposit counterparties shows that 60% of the

outstanding loans and deposits are booked in European Union countries, with more than one third within the euro area and the rest mostly with the United Kingdom. Resident banks’ net borrowing from the City of London financial centre increased to 40 billion, as borrowing denominated in euro decreased.

In 2013, the Banque de France’s net international asset position (excluding banknotes and coins) increased by 19 billion as a result of a 74‑billion reduction in liabilities, against a reduction of 55 billion in its assets. The reduction in liabilities was particularly significant on two items: institutional customers’ deposits (down by 35 billion) and liabilities towards the ESCB stemming from TARGET transactions (down by 39 billion).8

5| reserve assets

Gross reserve assets decreased by 34.8 billion to stand at 105.1 billion at the end of 2013 (Table T3‑8). The decrease is the result of negative price and exchange‑rate effects of 33.3 billion, with a 30.6‑billion cut in the valuation of gold stocks accounting for the bulk of the lower valuation, and 1.5 billion in negative balance of payment flows.

2012 and 2013 Balance of payments detailed presentation



2012 AND 2013 BALANCE OF

PAYMENTS detailed

presentation

Balance of payments – 2012

(EUR millions)


1. CURRENT ACCOUNT 794,577 826,376 -31,799

1.1. Goods 435,919 490,555 -54,636

1.1.1. General merchandise 418,112 490,555 -72,442

1.1.2. Merchanting 17,806 17,806

1.2. Services 183,987 159,243 24,744

1.2.1. Manufacturing services on physical inputs owned by others 6,244 4,877 1,3671.2.2. Maintenance and repair services n.i.e. 4,878 2,128 2,750

1.2.3. Transport services 37,579 37,892 -3131.2.3.1. Sea transport 13,156 11,061 2,0951.2.3.2. Air transport 12,510 13,056 -5471.2.3.3. Other transport 11,913 13,774 -1,8611.2.4. Travel 41,798 31,100 10,698

1.2.5. Construction services 3,375 2,280 1,095

1.2.6. Insurance and pension services 4,333 3,304 1,029

1.2.7. Financial services 10,025 5,699 4,3261.2.7.1. Services giving rise to explicit charges and other financial services 5,460 3,703 1,7571.2.7.2. Financial Intermediation Services Indirectly Measured (FISIM) 4,565 1,996 2,5691.2.8. Charges for the use of intellectual property n.i.e. 9,872 6,737 3,134

1.2.9. Telecommunication, computer and information services 12,165 11,670 496

1.2.10. Other business services 48,978 48,432 5461.2.10.1. Research and development services 9,868 12,090 -2,2221.2.10.2. Professional and management consulting services 14,767 13,440 1,3271.2.10.3. Technical, trade-related and other business services 24,343 22,901 1,4421.2.10. Personal, cultural and recreational services 4,005 4,751 -746

1.2.11. General government services n.i.e. 736 374 362

1.3. Primary income 163,286 122,594 40,692

1.3.1. Compensation of employees 16,629 976 15,653

1.3.2. Investment income 135,340 118,681 16,6601.3.2.1. Direct investment 64,954 25,870 39,0851.3.2.2. Portfolio investment 58,534 77,258 -18,7241.3.2.3. Other investment 11,412 15,508 -4,0961.3.2.4. Reserve assets 439 45 3941.3.3. Other primary income 11,317 2,938 8,379

1.4. Secondary income 11,385 53,984 -42,599

1.4.1. General government 3,434 32,081 -28,647

1.4.2. Other sectors 7,951 21,903 -13,9521.4.2.1. Miscellaneous current transfers 4,235 16,264 -12,0301.4.2.1.1 Workers’ remittances 530 8,770 -8,240

2. CAPITAL ACCOUNT 1,538 1,003 535

2.1. Acquisitions and disposals of non-produced, non-financial assets 33 4 292.2. Capital transfers 1,505 999 507



2012 AND 2013 BALANCE OF PAYMENTS detailed presentation

Balance of payments – 2012 (continued)

(EUR millions)

Assets Liabilities Net

3. FINANCIAL ACCOUNT -126,080 -105,083 -20,997

3.1. Direct investment 26,382 12,305 14,076

3.1.1. Equity capital 34,798 8,837 25,9603.1.2. Reinvested earnings 11,091 3,469 7,6213.1.3. Other transactions (intercompany lending) -19,507 -1 -19,505

3.2. Portfolio investment -1,650 24,889 -26,539

3.2.1. Equity securities and investment fund shares/units 54,250 25,358 28,892 Banque de France -16 – -16 General government 2,664 – 2,664 Monetary financial institutions 14,109 1,046 13,063 Other sectors 37,493 24,312 13,181

3.2.2. Long-term debt securities -79,620 36,452 -116,072 Banque de France -11,935 – -11,935 General government -2,613 55,199 -57,812 Monetary financial institutions -37,048 -6,266 -30,782 Other sectors -28,024 -12,481 -15,543

3.2.3. Short-term debt securities 23,720 -36,921 60,641 Banque de France -1,320 – -1,320 General government 575 -36,807 37,382 Monetary financial institutions 16,163 -2,538 18,701 Other sectors 8,302 2,424 5,878

3.3. Financial derivatives -108,770 -94,461 -14,309

Banque de France – – –

General government – – –

Monetary financial institutions -135,378 -127,508 -7,870Other sectors 26,608 33,047 -6,439

3.4. Other investment -46,067 -47,816 1,749

3.4.1. Other equity 6,558 -58 6,617 Banque de France 237 0 237 General government 6,321 -58 6,380

3.4.2. Currency and deposits -57,713 -80,707 22,994 Banque de France 13,309 -14,106 27,415 General government -73 279 -352 Monetary financial institutions -103,811 -66,880 -36,931 Other sectors 32,862 – 32,862

3.4.3. Loans 8,347 31,907 -23,560 Banque de France -9,576 12,649 -22,225 General government 26,297 27,101 -804 Monetary financial institutions -8,416 0 -8,416 Other sectors 42 -7,842 7,885

3.4.4. Trade credits and advances -2,824 762 -3,5863.4.5. Other accounts receivable/payable -435 281 -716

Monetary financial institutions -389 473 -861 Other sectors -46 -191 145

3.4.6. Special drawing rights 0 0

3.5. Reserve assets 4,025 4,025

Gold -5 -5

Special Drawing Rights -86 -86

Reserve position in the IMF 301 301

Other reserve assets 3,816 3,816

of which claims on the ECB 388 388

4. NET ERRORS AND OMISSIONS 10,269

n.i.e.: not included elsewhere.Note: Direct investment recorded according to the extended directional principle. Rounding differences mean that aggregate totals and balances may not be exactly equal to the sum of their components.Source: Banque de France.



2012 AND 2013 BALANCE OF

PAYMENTS detailed

presentation

Balance of payments – 2013

(EUR millions)


1. CURRENT ACCOUNT 796,459 826,735 -30,277

1.1. Goods 437,339 479,855 -42,516

1.1.1. General merchandise 415,710 479,855 -64,145

1.1.2. Merchanting 21,629 21,629

1.2. Services 191,953 173,686 18,267

1.2.1. Manufacturing services on physical inputs owned by others 6,435 4,806 1,6291.2.2. Maintenance and repair services n.i.e. 4,575 2,595 1,980

1.2.3. Transport services 37,089 38,823 -1,7341.2.3.1. Sea transport 12,644 10,974 1,6701.2.3.2. Air transport 11,451 13,119 -1,6681.2.3.3. Other transport 12,994 14,730 -1,7361.2.4. Travel 42,682 32,307 10,375

1.2.5. Construction services 3,327 2,621 707

1.2.6. Insurance and pension services 6,030 5,953 78

1.2.7. Financial services 10,020 5,395 4,6251.2.7.1. Services giving rise to explicit charges and other financial services 5,457 3,413 2,0431.2.7.2. Financial Intermediation Services Indirectly Measured (FISIM) 4,564 1,982 2,5821.2.8. Charges for the use of intellectual property n.i.e. 8,700 7,648 1,051

1.2.9. Telecommunication, computer and information services 13,029 14,110 -1,081

1.2.10. Other business services 56,031 54,878 1,1521.2.10.1. Research and development services 8,306 10,423 -2,1181.2.10.2. Professional and management consulting services 13,975 14,419 -4451.2.10.3. Technical, trade-related and other business services 33,750 30,036 3,7151.2.10. Personal, cultural and recreational services 3,173 4,091 -918

1.2.11. General government services n.i.e. 862 458 404

1.3. Primary income 154,979 115,715 39,264

1.3.1. Compensation of employees 17,031 1,158 15,873

1.3.2. Investment income 126,396 112,287 14,1091.3.2.1. Direct investment 58,491 24,291 34,2001.3.2.2. Portfolio investment 56,269 73,477 -17,2081.3.2.3. Other investment 11,126 14,467 -3,3421.3.2.4. Reserve assets 510 51 4591.3.3. Other primary income 11,552 2,270 9,282

1.4. Secondary income 12,188 57,479 -45,291

1.4.1. General government 3,716 34,178 -30,462

1.4.2. Other sectors 8,472 23,301 -14,8301.4.2.1. Miscellaneous current transfers 5,018 17,308 -12,2901.4.2.1.1 Workers’ remittances 541 8,946 -8,404

2. CAPITAL ACCOUNT 2,352 538 1,813

2.1. Acquisitions and disposals of non-produced, non-financial assets 93 17 762.2. Capital transfers 2,259 522 1,737



2012 AND 2013 BALANCE OF PAYMENTS detailed presentation

Balance of payments – 2013 (continued)

(EUR millions)

Assets Liabilities Net

3. FINANCIAL ACCOUNT -148,140 -133,955 -14,185

3.1. Direct investment 7,528 12,664 -5,136

3.1.1. Equity capital -1,512 13,448 -14,9603.1.2. Reinvested earnings 10,620 4,069 6,5513.1.3. Other transactions (intercompany lending) -1,580 -4,854 3,274

3.2. Portfolio investment 66,293 136,127 -69,834

3.2.1. Equity securities and investment fund shares/units 48,815 26,065 22,751 Banque de France 0 – 0 General government -70 – -70 Monetary financial institutions 39,609 3,790 35,820 Other sectors 9,275 22,275 -12,999

3.2.2. Long-term debt securities 36,304 82,046 -45,742 Banque de France -4,228 – -4,228 General government -2,240 58,132 -60,372 Monetary financial institutions -12,032 7,767 -19,799 Other sectors 54,805 16,146 38,659

3.2.3. Short-term debt securities -18,826 28,017 -46,843 Banque de France 23,267 – 23,267 General government -575 23,122 -23,697 Monetary financial institutions -39,295 2,257 -41,552 Other sectors -2,223 2,638 -4,862

3.3. Financial derivatives -216,107 -199,324 -16,784

Banque de France – – –General government – – –Monetary financial institutions -260,624 -254,024 -6,600Other sectors 44,517 54,700 -10,184

3.4. Other investment -4,401 -83,422 79,021

3.4.1. Other equity 6,304 -58 6,363 Banque de France 0 0 0 General government 6,305 -58 6,363

3.4.2. Currency and deposits -41,055 -61,961 20,906 Banque de France -20,396 -51,314 30,917 General government 143 -3,128 3,271 Monetary financial institutions 7,436 -7,519 14,955 Other sectors -28,237 – -28,237

3.4.3. Loans 28,819 -23,378 52,197 Banque de France -1,023 -14,469 13,446 General government 7,921 5,526 2,395 Monetary financial institutions 14,053 0 14,053 Other sectors 7,868 -14,435 22,303

3.4.4. Trade credits and advances 941 2,584 -1,6433.4.5. Other accounts receivable/payable 590 -609 1,199

Monetary financial institutions 961 -493 1,454 Other sectors -371 -116 -256

3.4.6. Special drawing rights 0 0

3.5. Reserve assets -1,453 -1,453

Gold 2 2

Special Drawing Rights -348 -348

Reserve position in the IMF -391 -391

Other reserve assets -716 -716

of which claims on the ECB -419 -419

4. NET ERRORS AND OMISSIONS 14,278

n.i.e.: not included elsewhere.Note: Direct investment recorded according to the extended directional principle. Rounding differences mean that aggregate totals and balances may not be exactly equal to the sum of their components.Source: Banque de France.

Appendices

Part iGlossary


annual report • 2013 a1

b

Balance of paymentsThe balance of payments is a statistical document that compiles and organises all of the economic and financial transactions of the economy of a country (or a monetary area) with the rest of the world over a given period. It is presented in compliance with the international standards set out in the 6th edition of the IMF Balance of Payments Manual (see “Methodology”). The national balance of payments is used to assess the position of the reporting economy in the international environment, to identify any emerging imbalances, to understand how these imbalances are financed by the rest of the world (when capital outflows are greater than capital inflows) or invested in the rest of the world (in the opposite case).

In accordance with Article L141‑6 of the Monetary and Financial Code (Act 2007‑212 of 20 February 2007), the Banque de France is responsible for compiling France’s balance of payments and international investment position. The Banque de France also contributes to compiling the aggregate euro area balance of payments and international investment position. It has the power to require all economic and financial agents to submit any documents and information that it needs to perform this task. In operational terms, the Balance of Payment Directorate and the Industry Surveys and Statistics Directorate of the Banque de France’s Directorate General of Statistics compile the balance of payments.

A simplified version of France’s balance of payments is compiled on a monthly basis. More detailed revised data, and the international investment position data, are published once a quarter. The balance of payments and the international investment position are usually revised over the last three years when the Annual Report is published. With the changeover to BPM6, the revisions affected data going back to 2008.

Book valueFrance’s international direct investment position is valued at book value, market value and mixed value (see definitions). The book value of direct investment stocks is the value that enterprises report in their

financial statements. In the case of outward direct investment, this value is shown in the tables recording subsidiaries and equity interests that are appended to companies’ annual financial statements. In the case of inward direct investment, this value is shown on the balance sheets of resident companies affili‑ated with non‑resident direct investors.

BPM6 (Balance of Payments Manual – 6th edition)

See “Methodology”.

c

Capital accountThe capital account records capital transfers, meaning transactions involving transfers of ownership on fixed assets or cancellation of liabilities by creditors without any counterparts being received in return (debt forgiveness, write‑offs, investment grants, etc.) and purchases and sales of non‑produced, non‑financial assets (see definition).

Capital transfers – debt forgivenessDebt forgiveness granted by the French general government sector to a foreign country is a transfer to a non‑resident agent. Accordingly, it is recorded as a debit from the capital account. On the other hand, the debt forgiveness decreases general government assets and is therefore recorded as a credit to the financial account under “other investment”. Debt forgiveness is broken down by the sector of the resident debtor or creditor.

Capital transfers – other transfersOther capital transfers include investment grants received from or paid to other countries as part of development assistance. Transfers received by the French general government sector come mainly from European institutions.

Changes in the international investment position

Changes in the international investment position between two dates stem from:

• balance of payments flows;

a2the french balance of payments and international investment position


PART IGlossary

• changes in exchange rates and the prices of listed shares;

• other changes, including reclassification of items, changes in methodology and statistical discrepancies between two reporting dates.

Current accountThe current account records flows of goods, services and primary and secondary income between France and the rest of the world. The current account balance is the difference between exports and income receivable and the imports and income payable by residents. It corresponds to an economy’s net lending/net borrowing in the system of national accounts.1 The current account balance indicates the French economy’s capacity to balance its trade with the rest of the world. All else being equal, a lasting current account deficit leads to a deterioration of the international investment position and, consequently, increased financial dependency on non‑residents. An accumulation of current account surplus, all else being equal, leads to a net asset position on the international investment position.

d

Direct investmentDirect investment covers investors’ transactions to acquire or dispose of a lasting interest in an enterprise and to increase or dispose of influence over its management. Therefore, the notion of direct investment is broader than that of control. By convention, a direct investment relationship exists when an individual or a legal entity (direct investor) holds at least 10% of the voting rights or, failing that, 10% of the equity capital in a “direct investment enterprise”.

Direct investment creates relationships between fellow enterprises, meaning:

• a “direct investor” (parent company) and one or more direct investment enterprises, which may be branches, subsidiaries or other affiliated enterprises;

• mutually “invested enterprises” (fellow enterprises) that hold reciprocal direct investment stakes in each other.

e

Errors and omissionsThe “net errors and omissions” item is a balancing item that exists because, unlike a simple double‑entry

accounting system, debits and credits in the balance of payments are not recorded simultaneously for each transaction. Instead they are recorded from reports and surveys using different sources. The errors and omissions item records statistical discrepancies arising from uncertainty about the coverage of certain data collections, time lags, methodological differences, etc. By construction, the errors and omissions item is equal, but with the opposite sign, to the difference between the financial account balance, on the one hand, and the sum of the capital account balance and the current account balance, on the other hand. In the medium term, errors and omissions tend to cancel each other out.

Extended directional principle (direct investment – other transactions – intercompany lending)

Under the BPM6 format, the extended directional principle provides a supplementary measurement of direct investment data. Under this principle, lending between fellow enterprises belonging to the same international group must no longer be classified according to the direction of the loans, but according to the country of residence of the parent company. The term “directional principle” refers to the impact this method has on the “direction of the loan” and the term “extended” means that the directional principle applies to conventional dealings between parent companies and subsidiaries, as well as to dealings between companies with no direct ownership links that belong to the same group (“fellow enterprises”). This method, which offsets cross‑border loan flows and stocks within individual groups, leads to a substantial reduction in France’s overall volume of outward and inward direct investment flows and stocks compared to the data compiled according to the standard asset‑liability presentation defined for all components of the financial account in the IMF Balance of Payments and International Investment Position Manual.

f

Financial derivativesThis item includes premiums on options and futures bought and sold by resident banks and by other sectors, along with margin calls, adjustment payments and interest payments on swaps. Stocks of financial derivatives are recorded at market value.

1 The new statistical manuals for the balance of payments (the IMF’s 6th Balance of Payments Manual) and the national accounts (the European System of Accounts 2010), which came into application in 2014, ensure greater consistency between the two sets of statistics.



PART IGlossary

Financial intermediation services indirectly measured (FISIM)

FISIM are the services that financial intermediaries provide without charging customers. Financial intermediaries pay themselves for these services through an interest rate margin on deposits and loans. Indeed, real interest rates include an income component (the “pure” interest rate) and a charge for the financial intermediation service provided.

Foreign exchange reservesSee “Reserve assets”.

FranceFor the purposes of the balance of payments, France includes the departments in metropolitan France, the Principality of Monaco, the overseas departments (Guadeloupe, French Guyana, Martinique, Reunion and Mayotte), and the collectivities of Saint Barthelemy, Saint Martin and Saint Pierre and Miquelon.2 All other countries, territories and institutions, including the European Central Bank (ECB), are regarded as non‑residents.

G

General governmentThe general government sector includes central government, various central administration bodies (universities, regional health agencies, the national meteorological office, etc.), local governments and social security organisations.

GoodsGoods are physical, produced assets over which ownership rights can be established and whose economic ownership can be transferred from one institutional unit to another by engaging in transactions. Trade in goods is evaluated on the basis of foreign trade statistics from the Directorate General of Customs and Excise, which are restated to comply with the balance of payments methodology.3 In addition, trade in goods includes transactions relating to goods procured in ports by carriers, recorded as general merchandise, and goods under merchanting transactions.

Goods for processing and repairSee “Manufacturing services on physical inputs owned by others”.

Goods procured in ports by carriersThis item covers purchases of goods, such as fuel, stores and provisions in foreign ports and airports by resident carriers and by foreign carriers in France. It does not cover related services, such as towing and warehousing, which are recorded as transport services. The BPM6 records goods procured in ports by carriers under general merchandise, whereas the previous edition recorded them under a separate item.

i

Intercompany lending (direct investment)The “other transactions” item under direct investment includes all short‑term and long‑term loans, advances and deposits between companies in direct investment relationships, with the exception of loan and deposit transactions between resident banks and other monetary financial institutions and non‑resident banks and monetary financial institutions belonging to the same group, which are classified as “other investment”.

InterestInterest is property income received by owners of certain financial assets (deposits, securities other than equities, credits and other receivables). Interest is recorded on an accrual basis. For example, for a loan booked on 1 January of year N and maturing on 31 December of the same year, the annual balance of payments will record interest receipts or payments vis‑à‑vis non‑residents (as appropriate) on an annual basis. If the loan is booked from 1 March in year N and matures on 31 March of the following year, the balance of payments for year N will record the prorated interest due for 9 months. The accrual principle is in line with the “change of economic ownership” principle, which is the benchmark criterion for recording all real and financial transactions in the balance of payments.

International investment positionFrance’s international investment position presents all residents’ assets and liabilities vis‑à‑vis non‑residents on a given date. Claims and assets are added to the position and debts and liabilities are subtracted. The international investment position gives an indication of the amount and structure of residents’ financial wealth in terms of foreign assets and of non‑residents’ financial wealth in terms of French assets. See also “changes in the international investment position”.

2 The other collectivities (French Polynesia, Wallis and Futuna) and New Caledonia, which are not legally members of the European Union or the euro area, are excluded from France’s balance of payments statistics. Furthermore, the two largest communities, French Polynesia and New Caledonia, have their own individual balances of payments compiled by the Institut d’émission d’outre‑mer (overseas departments note-issuing bank).

3 See the box in Chapter 1 on the transition from customs data to balance of payments data.



PART IGlossary

Investment incomeInvestment income corresponds to receipts or payments relating to external financial assets and liabilities. They are broken down by the nature of the related financial transactions: direct investment income, portfolio investment income, other investment income and reserve asset income. Investment income is a component of the current account.

l

Long termFor the purposes of balance of payment statistics, long term refers to initial maturities of more than one year. The initial maturity is that stipulated when a financial transaction is initiated and is distinct from the notion of “residual maturity”.

m

Manufacturing services on physical inputs owned by others

This category is now classified with services (it was previously classified with goods in the 5th edition of the Balance of Payments Manual). It includes transactions involving:

• processing, such as oil refining and metal and textile processing;

• charges for repairs on goods sent for that purpose.

Market valueFrance’s international direct investment position is valued at book value, market value and mixed value (see definitions). The market value of stocks of outward and inward direct investment is estimated jointly with national accounts staff, but only for equity capital.

MerchantingMerchanting covers transactions related to residents’ purchases and resale of foreign goods to non‑residents when the goods are not imported into France’s customs territory, and to non‑residents’ purchases and resale to non‑residents of French goods that stay within France’s customs territory. Transactions in goods under merchanting are now included in goods, instead of services, but recorded separately from general merchandise.

MethodologyBalance of payments and international investment position statistics are critical for understanding the macroeconomic situation of a country. At its inception, the International Monetary Fund was given the task

of defining a methodology to be used by all member countries. This methodology is described in the Balance of Payments and International Investment Position Manual, which is periodically updated to ensure that it incorporates structural changes in world trade. For the first time in 2014, the Banque de France is applying the new edition of the Balance of Payments Manual (6th edition), referred to herein as BPM6. Further information about the new methodology and its implementation in France can be found on the Banque de France website: https://www.banque-france.fr/en/economics-statistics/database/methodology/methodology-for-the-balance-of-payments-and-international-investment-position.html.

Mixed valueFrance’s international direct investment position is valued at book value, market value and mixed value (see definitions). In mixed value, the stocks of listed securities are recorded at market value, whereas the stocks of unlisted assets and liabilities are recorded at their book value.

Monetary authoritiesFrance’s monetary authorities correspond to the Banque de France.

Monetary financial institutions (MFIs)The monetary financial institutions (MFIs) sector, excluding the central bank, includes resident credit institutions, as defined in European legislation,4 and all other resident financial institutions whose business is to receive deposits (or close substitutes for deposits) from entities other than MFIs and, for their proprietary account, to grant credit and/or make investments in securities. This category also includes electronic monetary institutions, meaning those that engage in financial intermediation primarily by issuing electronic currency. The Caisse des Dépôts et Consignations, money market funds and the Caisse Nationale d’Épargne are also part of the MFI sector. On the other hand, payment institutions are not part of this sector.

n

Non‑produced non‑financial assetsThis category corresponds to purchases and sales of natural resources (such as land, mineral rights, water and forests), along with contracts, leases and licences, and marketing assets (registered trademarks and models, logos, domain names, etc.).

4 Credit institutions are defined as an undertaking the business of which is to take deposits or other repayable funds from the public and to grant credits for its own account (Article 4 of EU Regulation 575/2013 of 26 June 2013).







PART IGlossary

o

Other investment (loan‑deposit position)The “other investment” component of the financial account includes all transactions in financial assets and liabilities with non‑residents that do not concern direct investment, portfolio investment, financial derivatives or reserve assets. In practice, this mainly concerns bank deposits and interbank lending, as well as loans and deposits made by insurance companies and all kinds of investment companies and funds.

Other sectors“Other sectors” records transactions by economic agents that are not monetary authorities, general government nor monetary financial institutions. This category covers other financial corporations (insurance companies, investment companies, investment funds except money market funds, which are classified as monetary financial institutions), industrial and commercial companies, households, unincorporated enterprises and non‑profit institutions serving households (associations, foundations, etc.). The latter are often designated by the acronym NPISH, especially in the statistical tables in the Annual Report.

p

Portfolio investmentPortfolio investment covers all transactions in negotiable securities between residents and non‑residents, including purchases of new issues, trading and redemptions, other than transactions included in direct investment, reserve assets, financial derivative futures or repurchase transactions.

Primary incomePrimary income refers to the flows received by economic agents for their participation in the production process (“compensation of employees”) or for the provision of financial assets (“investment income”) or for the rental of natural resources (“rent”). Taxes and subsidies on products and production are also included in primary income.

r

Reinvested earningsReinvested earnings are the undistributed share of after‑tax operating income from subsidiaries and equity interests attributable to the direct investor. These earnings are allocated to the company’s reserves. In accounting terms, reinvested earnings are the share of current net income from direct investment enterprises attributable to the parent company for an

accounting period, minus dividends paid to the parent company for the same period. In order to present a fair view of reinvested earnings, in the case of a parent company in France that reinvests some or all of the earnings of a direct foreign subsidiary in that subsidiary, the reinvested earnings would be recorded as a capital outflow or a payment under “Direct investment”, designated as “reinvestment of earnings”, and as a receipt under “Income”, designated as “reinvested earnings”. The transaction is recorded in the opposite direction in the case of a foreign parent company that reinvests the earnings of a French subsidiary in that subsidiary. Therefore, reinvested earnings affect the current account balance and the direct investment balance in opposite directions.

Reinvestment of earningsSee “Reinvested earnings”.

Reserve assetsReserve assets are those external assets that are readily available to the central bank. Since the creation of the euro area, France’s balance of payments records only transactions in the foreign exchange reserves that have not been transferred to the European Central Bank and are still managed by the Banque de France. Furthermore, the common methodology adopted for reserve assets by the countries belonging to the Monetary Union records only claims on non‑residents outside of the euro area and excludes foreign currencies deposited with non‑resident banks located inside the euro area. Reserve assets are made up of gross assets in monetary gold and foreign currencies, including securities issued by non‑residents, special drawing rights (SDRs) and France’s net position in the IMF.

Residents/non‑residents• Residents are:

– natural persons having their centre of predominant economic interest in France, regardless of their nationality, except for foreign civil servants and military personnel assigned to France, who remain non‑residents;

– civil servants and other French government employees posted to other countries or seconded to international organisations or other non‑resident employers;

– French and foreign legal entities, for their establishments in France, except for foreign diplomatic missions and international organisations based in France, when there is a real economic activity carried out in France by autonomous production units, regardless of their legal form (subsidiary, branch, agency, office, etc.).



PART IGlossary

• Non‑residents are:

– foreign and French individuals who live abroad, meaning who are actually located abroad, with the exception of French diplomatic missions and French civil servants posted abroad;

– foreign and French legal entities, for their establishments abroad, when they have a real economic activity performed abroad by autonomous production units, regardless of their legal form.

Resident economic sectorsIn some of the balance of payments items, in particular primary and secondary income, portfolio investment and other investment, the amounts recorded are classified according to the institutional sector of the resident party to the transaction.

These sectors are:

• monetary authorities;• general government;• monetary financial institutions;• “other sectors”.

s

Secondary incomeSecondary income records transactions between residents and non‑residents that do not involve the transfer of ownership of a fixed asset or the transfer of funds in return for the acquisition of a fixed asset. For example, current international cooperation is recorded as secondary income, as are income tax payments or workers’ remittances.

Secondary income ‑ general governmentGeneral government secondary income includes:

• payments made as part of international cooperation, including France’s contributions to cover the expenses of international organisations;

• receipts and payments from and to foreign general government sectors under the terms of tax agreements;

• social security payments to non‑resident workers and former workers and their heirs;

• transactions with European organisations, excluding assistance to France from the European Regional Development Fund (ERDF) and the European Agricultural Fund for Rural Development (EAFRD), which are recorded as capital transfers, in accordance with international methodology.

Secondary income – other operations“Other operations” covers a wide variety of transactions, such as non‑life insurance premiums and claims, humanitarian grants and donations to individuals and legal entities, subsidies and grants, severance payments, guarantees and compensation for damages, literary, artistic and scientific prizes etc.

Secondary income – personal transfersPersonal transfers consist of all current transfers in cash or in kind made or received by resident households to or from non‑resident households. Workers’ remittances (see definition) make up the bulk of personal transfers.

Securities positionThe securities position records stocks of foreign securities held by residents (assets) and stocks of French securities held by non‑residents (liabilities) at market value (including accrued interest for fixed‑income securities).

ServicesServices constitute the second main component of the current account. Unlike goods, where production and marketing are clearly separate activities, trade in services is closely linked to their production. Trade in services includes transport services and travel.

Short termFor the purposes of balance of payment statistics, short term refers to initial maturities of one year of less.

Sign conventionsBy convention, all current account transactions have a positive sign, with the exception of acquisitions for merchanting, which have a negative sign. A positive balance (credits minus debits) indicates that receipts are greater than payments, signalling a capital inflow. In the case of assets and liabilities in the financial account, a positive figure indicates an increase in assets or liabilities, and a negative figure indicates a decrease in assets or liabilities. A simultaneous increase of the same amount in assets and liabilities does not change the balance of the financial account.



PART IGlossary

t

Trade credits and advancesTrade credits and advances arise from credits granted by resident enterprises to non‑resident customers (assets) or credits granted by non‑residents to resident customers (liabilities), regardless of their maturity. This item also covers advances. Trade credits between companies in a direct investment relationship are recorded under “direct investment”. Other trade credits are recorded under “other investment”.

Transport servicesThis item records transactions reported for goods and passenger transport, along with the related expenses, except for goods procured in ports by carriers (see definition), and the estimated shipping expenses included in trade in goods. Transport services receipts and payments related to international travel, such as the air fare for tourists travelling between their home country and France, are not recorded under the “travel” item, but under transport services instead. On the other hand, non‑residents’ use of domestic transport services in France, and French residents’ use of domestic transport services in a foreign country, are recorded under “travel”.

TravelThe “travel” item records natural persons’ expenditure when travelling abroad.

• Travel receipts record spending in France by non‑residents staying in France for less than one year, along with spending for personal services (healthcare, tuition, etc.) purchased from residents.

• Travel payments record similar spending by residents abroad.

Transport services receipts and payments for international travel are not recorded under the “travel” item, but under “transport services” instead. On the other hand, “travel” does include non‑residents’ use of domestic transport services in France and French residents’ use of domestic transport services in a foreign country.

W

Workers’ remittancesWorkers’ remittances are the amounts transferred abroad by resident workers and vice versa. Workers’ remittances are recorded under “secondary income”.

Diagram of the sign convention

+ –

Current account

Credit Receipt(for example: export, receipt of a dividend or a benefit)

Payment(acquisition of goods under merchanting)

Debit Payment(for example: import, remittance)

Balance Surplus Deficit

Financial account

AssetsIncrease in assets(for example: a direct investment abroad creates a foreign asset)

Decrease in assets(for example: a resident’s sale of American Treasury bonds decreases claims on the United States)

Liabilities

Increase in liabilities(for example: borrowing from foreign banks increases liabilities to non‑residents)a)

Decrease in liabilities(for example: redemption of French government bonds owned by non‑residents reduces government debt to non‑residents, thereby reducing liabilities)b)

Net Increase in France’s net assets Decrease in France’s net assets

a) The immediate counterpart to this transaction is an increase in the assets of a foreign central bank or correspondent bank (a positive change, but in assets).b) The counterpart is a decrease in the assets of a foreign central bank or correspondent bank (negative changes, but in assets).

Capital inflow Capital outflow

Part iiDefinition of geograPhical zones



European Union member countries (at 31 December 2013)

Germany* Italy*Austria* LatviaBelgium* LithuaniaBulgaria Luxembourg*Cyprus* Malta*Croatia Netherlands*Denmark PolandSpain* Portugal*Estonia* Czech RepublicFinland* RomaniaFrance* United KingdomGreece* Slovakia*Hungary Slovenia*Ireland* Sweden

The European Union includes the countries listed above, along with the European Union institutions (European Investment Bank, European Development Fund and other European Community institutions).

As of 31 December 2013, the Economic and Monetary Union had 17 member countries (denoted by *), along with the European Central Bank and the European Stability Mechanism.

The geographical zones are defined in the standard lists drawn up by Eurostat.

Other industrialised countries

Australia JapanCanada NorwayUnited States New Zealand Iceland Switzerland



PART IIDefinition of geographical

zones

Offshore financial centres (List compiled by Eurostat)Andorra American Virgin IslandsAnguilla British Virgin IslandsAntigua and Barbuda JerseyAruba LebanonBahamas LiberiaBahrain LiechtensteinBarbados Mauritius Belize Montserrat Bermuda NauruCuraçao NiueDominica PanamaGibraltar PhilippinesGrenada Saint Kitts and NevisGuernsey Saint LuciaHong Kong Saint Martin Isle of Man Saint Vincent and the GrenadinesCayman Islands SamoaCook Islands Seychelles Marshall Islands Singapore Turks and Caicos Islands Vanuatu

Part iiiBalance of Paymentsrevisions of 2011 and 2012 data



For the publication of each Annual Report, some of the data from previous years are usually updated. Most of the revisions concern the previous two years. This year, the usual revisions are supplemented by methodological changes stemming from the changeover to the 6th edition of the Balance of Payments Manual1 and improvements made to existing data processing and collection to provide a better account of structural changes in the economy.

main revisions to the current account

The 6th edition of the Balance of Payments Manual stipulates new classifications for certain current account items. The biggest change concerns merchanting, which is now classified as trade in goods and no longer as trade in services. The merchanting balances now stand at 15 billion for 2011 and 18 billion for 2012. On the contrary, “manufacturing services on physical inputs owned by others” (called “goods for processing” under the BPM5 terminology) are now classified as services and no longer as goods. The balances now stand at 3 billion for 2011 and 1 billion for 2012. Finally, financial intermediation services indirectly measured (FISIM), which records the financial margin that banks make on their lending and deposit transactions with non‑bank customers, are subtracted from income from “other investment” and now included in trade in services. This change was implemented starting with 2012 as the reference year, when the balance on FISIM stood at slightly less than 3 billion.

The revisions resulting from these methodological changes reduced the goods and services deficit by 4 billion in 2011 and by 5 billion in 2012. Most of these revisions stem from the inclusion of the findings of the Banque de France “supplementary survey on international trade in services” (ECEIS)2 in 2012 and improved data processing for 2011. Furthermore, customs data are now being restated to account for the coordinated manufacturing of Airbus, in keeping

with the principle of economic ownership. This change improved the balance on general merchandise under the goods item by 1 billion in 2011 and by 2 billion in 2012. Three improvements have been made to the transport item. In addition to the revisions based on the ECEIS survey, the restatement of customs data on imports of goods to strip out the cost of freight (FOBisation) was revised to make it consistent with national accounts methodology. The measurement of payments for air transport services was also improved.

Revisions of direct investment income in 2012 stem mainly from annual financial statements of French companies in direct investment relationships with non‑residents and foreign subsidiaries of resident groups. In addition to the usual process of incorporating more complete information when compiling the Annual Report, portfolio investment income now includes the capitalised interest of investment funds, as stipulated in the 6th edition of the Balance of Payments Manual. It was also affected by the change in the method for calculating accrued interest on debt securities, which had the most impact on income in 2010 and 2011. Revised data on other investment income reduced the balance, primarily as a result of the new classification of FISIM in financial services.

In accordance with the stipulations of the 6th edition of the Balance of Payments Manual, other primary income includes taxes and subsidies on production that were previously included in current transfers. Furthermore, with no change to coverage, the deficits on other primary and secondary income are reduced by 4 billion in 2011 and by 2 billion in 2012. This stems from the use of new accounting data sources from the European Union to evaluate the contribution that European institutions make to France’s balance of payments.

main revisions to the financial account

Direct investment

The balance on direct investment was reduced slightly by 1 billion in 2011 and increased by 5 billion in 2012 from 9 billion to 14 billion. These revisions are smaller than past revisions.

1 See “Glossary” and the website: https://www.banque‑france.fr/en/economics‑statistics/database/methodology/methodology‑for‑the‑balance‑of‑payments‑and‑international‑investment‑position.html

2 See “Methodological Information” in the supplement to the 2011 Annual Report – The French Balance of Payments and International Position.







PART IIIBalance

of payments Revisions

of 2011 and 2012 data

As in previous years, a major source of revisions is the substitution of data from the annual financial statements of French and foreign companies for the estimates made in the first quarter of 2013. This revision affects both equity capital and reinvested earnings. The latter were increased by 5 billion in 2012 for direct investment abroad and by 3 billion for direct investment in France. In addition to the usual revisions, residents’ foreign real estate investments increased in value by some 2 billion per year over several years.

The methodological revisions relating to the 6th edition of the Balance of Payments Manual mainly concern intercompany lending (“other transactions”, presented herein in accordance with the extended directional principle). In contrast to previous years, trade credits between affiliates, as shown by the Banque de France survey on trade receivables and payables vis‑à‑vis non‑residents (ECO) are now counted as direct investment. On the other hand, lending between monetary financial institutions and other financial intermediaries are now classified as other investment. In aggregate, revisions of intercompany lending result in a reduction of outward lending by 5 billion in 2011 and by 7 billion in 2012. Inward intercompany lending was increased by 3 billion in 2011 and offset by an equivalent reduction in 2012.

Portfolio investment

Revisions of portfolio investment were quite small and mainly concerned liabilities. The revisions of 2011

data were largely offset by the revisions of 2012 data. They decrease the balance by 12 billion in 2011, including an increase of 11 billion in liabilities, and they increase the balance by 13 billion in 2012, including a decrease of 8 billion in liabilities. These revisions stem from the inclusion of estimated investment flows of households and non‑financial corporations in securities held abroad, from the inclusion of data received after the quarterly reporting dates and, in 2013, from supplementary information obtained about repurchase agreement transactions on government securities, which are the main source of the revisions to liabilities on long‑term debt securities.

Other investment

Revisions to other investment, which mainly includes loans and deposits not included elsewhere, increased the balance by 15 billion in 2011 and by 36 billion in 2012. The revisions are the result of methodological changes, especially the reclassification of trade credits and monetary financial institutions’ transactions from direct investment to other investment. They also stem from revisions and improvements in data processing, such as a revision of the geographical structure of inter‑bank transactions. These revisions and improvements make France’ statistics more consistent with banking statistics from other countries. In aggregate, assets and liabilities were reduced in 2011, whereas assets were increased by 6 billion for monetary financial institutions and by 17 billion for sectors other then MFIs and general government in 2012. At the same time, liabilities were decreased, especially liabilities towards MFIs.



PART IIIBalance of payments Revisions of 2011 and 2012 data

Balance of principal balance of payments components

(EUR billions)

2011 2012

Annual Report 2012

Annual Report 2013

Revisions Annual Report 2012

Annual Report 2013

Revisions

Current account ‑35 ‑22 13 ‑44 ‑32 13Goods ‑77 ‑65 12 ‑71 ‑55 16Services 31 24 ‑8 33 25 ‑8

Transport services -3 -1 2 0 0 0Travel 7 7 0 11 11 -1

Income (BPM5)/Primary income (BPM6) 45 56 11 30 41 11Compensation of employees 15 15 0 15 16 0Investment income 30 35 5 14 17 2

Direct investment 39 40 1 32 39 7Portfolio investment ‑9 ‑6 3 ‑18 ‑19 0Other investment 1 1 0 0 ‑4 ‑5Reserve assets – 1 – – 0 –

Other primary income – 6 6 – 8 8Current transfers (BPM5)/Secondary income (BPM6) ‑35 ‑37 ‑2 ‑36 ‑43 ‑6Capital Account 0 1 1 0 1 1Financial account ‑54 ‑52 2 ‑74 ‑21 53Direct investment 15 14 ‑1 9 14 5

Abroad 35 38 3 28 26 ‑2of which: equity capital 23 29 6 35 35 0

reinvested earnings 6 8 2 6 11 5 other transactions (intercompany lending) 6 1 -5 -13 -20 -7

In France 20 24 4 19 12 ‑6of which: equity capital 21 23 2 15 9 -6

reinvested earnings -1 -1 -1 1 3 3 other transactions (intercompany lending) 0 2 3 3 0 -3Portfolio investment ‑229 ‑241 ‑12 ‑39 ‑27 13

Assets (residents’ transactions in securities issued by non‑residents)

‑167

‑168

‑1

‑6

‑2

5

Equity securities and investment fund shares/units ‑39 ‑40 ‑1 50 54 4Long‑term debt securities ‑87 ‑84 3 ‑79 ‑80 ‑1Short‑term debt securities ‑40 ‑43 ‑3 22 24 1

Liabilities (non‑residents’ transactions in securities issued by residents)

62

73

11

33

25

‑8

Equity securities and investment fund shares/units 5 6 1 28 25 ‑3Long‑term debt securities 80 90 9 42 36 ‑5Short‑term debt securities ‑23 ‑22 1 ‑37 ‑37 0

Financial derivatives ‑14 ‑14 0 ‑14 ‑14 0Other investment 179 194 15 ‑34 2 36

Assets 82 64 ‑18 ‑69 ‑46 23of which: monetary financial institutions 57 59 2 -119 -113 6

Liabilities ‑98 ‑131 ‑33 ‑35 ‑48 ‑13of which: monetary financial institutions -173 -181 -8 -55 -66 -11

Reserve assets ‑6 ‑6 0 4 4 0Net errors and omissions ‑18 ‑31 ‑12 ‑29 10 39

Note: The 2012 Annual Report was published in 2013 in accordance with the 5th edition of the Balance of Payments Manual and the 2013 Annual Report was published in 2014 in accordance with the 6th edition of the Balance of Payments Manual. Direct investment is presented according to the extended directional principle. The sign convention used is that from the 6th edition of the Balance of Payments Manual.Source: Banque de France.

Part ivinternational investment Positionrevisions of 2011 and 2012 data



As is the case for the balance of payments, several items in France’s international investment position have been revised in this Annual Report (Table below). Some of these revisions stem from the changes introduced in the 6th edition of the Balance of Payments Manual, and others are the result of the usual revision process and the inclusion of corrections and data that were not previously available.

There are several reasons for the revisions to the international direct investment positions. The bulk of the revisions to direct investment abroad or direct investment in France expressed in mixed value concerns intercompany lending, which now includes trade credits between fellow enterprises, as shown by the Banque de France survey on trade receivables and payables vis‑à‑vis non‑residents

Revisions of 2011 and 2012 international investment position dataPrinciple components of the international investment position

(EUR billions)

2011 2012

Annual Report 2012

Annual Report 2013

Revisions Annual Report 2012

Annual Report 2013

Revisions

Direct investment At mixed value 410 428 18 409 427 19At market value 246 273 26 305 417 113Abroada)

At mixed value 907 947 40 936 966 30At market value 731 790 59 881 958 77

In Francea)

At mixed value 498 519 22 527 539 11At market value 485 517 32 576 541 ‑36

Portfolio investment ‑599 ‑547 52 ‑681 ‑621 60Foreign securities 1,827 1,866 39 1,948 1,991 43

Equity securities and investment fund shares/units 393 401 8 483 495 12Long‑term debt securities 1,247 1,257 10 1,262 1,271 9Short‑term debt securities 187 207 21 203 225 22

Domestic securities 2,426 2,412 ‑13 2,629 2,612 ‑17Equity securities and investment fund shares/units 499 501 2 594 593 ‑1Long‑term debt securities 1,687 1,672 ‑15 1,832 1,816 ‑16Short‑term debt securities 240 240 0 203 203 0

Financial derivatives ‑42 ‑44 ‑3 ‑43 ‑45 ‑2Other investment ‑115 ‑125 ‑10 ‑150 ‑137 13Trade credits and advances ‑1 ‑4 ‑4 ‑2 ‑12 ‑10Banque de France loan‑deposit position ‑177 ‑177 0 ‑170 ‑170 0

General government loan‑deposit position 20 20 0 25 25 0

MFIs’ loan‑deposit position 71 82 12 8 37 29

Loan‑deposit position of other sectorsb) ‑28 ‑34 ‑6 ‑10 ‑5 6Special drawing rights – ‑12 ‑12 – ‑12 ‑12

Reserve assets 133 133 0 140 140 0With direct investment at mixed value ‑213 ‑155 58 ‑326 ‑236 89With direct investment at market value ‑376 ‑310 66 ‑430 ‑246 183

a) Direct investment is presented according to the extended directional principle.b) Non-financial corporations, insurance companies, other financial intermediaries, investment funds other than money market funds and households.Note: The 2012 Annual Report was published in 2013 in accordance with the 5 th edition of the Balance of Payments Manual and the 2013 Annual Report was published in 2014 in accordance with the 6 th edition of the Balance of Payments Manual. The sign convention used is that from the 6 th edition of the Balance of Payments Manual.Source: Banque de France.



PART IVInternatIonal

Investment posItIon

revIsIons of 2011

and 2012 data

(ECO), which excludes lending transactions between monetary financial institutions and other financial intermediaries (now classified as other investment). The revisions increase the stocks of inward and outward direct investment by 20 billion to 30 billion.

Another component of direct investment, stocks of investment in equity capital was also revised. Direct investment abroad increased at the end of 2011 and 2012 and direct investment in France decreased. The revisions result from data obtained from corporate balance sheets and, in the case of direct investment abroad, from a new estimate of the value of real estate investment abroad.

The increase in the international investment position at the end of 2012 at market value by 113 billion stems from a measurement supplemented by price and exchange‑rate effects that were positive for direct investment abroad and negative for direct investment in France.

The main revisions to the international portfolio investment position result from the inclusion of estimates of assets held abroad by households and non‑financial corporations, the inclusion of information received late, particularly regarding the early redemption of bonds by residents and supplementary information

obtained about repurchase agreement transactions involving government securities. The revisions increased residents’ assets in foreign securities at the end of 2011 and 2012, for all types of instruments, and decreased their liabilities for long‑term debt securities.

The “other investment” position was also revised.

Trade credits and advances, revealed by the ECO survey, were revised and intercompany lending was reclassified as direct investment. The aggregate impact on the balance was small at the end of 2011, but slightly larger at the end of 2012 with a negative change of 10 billion.

The loan‑deposit position of monetary financial institutions was increased by 12 billion in 2011 and by 29 billion in 2012. The revision is the result of a change in methodology, with the inclusion of stocks that were previously classified as direct investment, along with a revision of the geographical structure of interbank transactions.

Finally, in accordance with the 6th edition of the Balance of Payments Manual, other investment is now presented by type of instrument and now includes 12 billion in liabilities corresponding to the issuance of special drawing rights.

REPRODUCTION AUTHORISED WITH CREDIT

Publisher

Jacques FOURNIER Director General of Statistics Banque de France

Production

Economic Publications Division Press and Communication Directorate

This report is available free of charge on the Banque de France website:

https://www.banque-france.fr/en/ economics-statistics/balance-of-payments-and-other-international-statistics/balance-of-payments-and-international-investment-position.html

where you will also find supplementary statistical tables.

Printer: Banque de France 31, rue Croix des Petits‑Champs 75001 Paris

Legal deposit: June 2014 ISSN 0292‑6733






InteractIve lInks

p17

sup20the french balance of payments and international investment position


Contents

of statistiCs

1.2 Geographical structure of trade in goods

(EUR billions)

Exports Imports Balance

Amount 2013

Change 2013/2012

(%)

Amount 2013

Change 2013/2012

(%)

Amount 2013

Change 2013/2012

(EUR billions)

Euro area 200.5 -1.2 241.5 -2.0 -41.0 2.6of which: Germany 70.3 -1.8 86.7 -3.5 -16.3 1.8

Italy 30.4 -5.1 36.4 -3.0 -6.0 -0.5 Spain 29.0 -1.2 30.8 -1.0 -1.8 0.0

United Kingdom 29.5 0.8 20.9 -8.6 8.6 2.2

New European Union Member Statesa) 22.3 3.6 27.8 4.0 -5.4 -0.3

Americas 43.1 2.7 45.0 -3.0 -1.8 2.5of which: United States 26.9 1.5 32.7 -0.7 -5.8 0.6Asia 64.7 -2.3 86.9 -2.8 -22.2 1.0of which: Japan 6.8 -8.0 8.0 -12.2 -1.2 0.5

China and Hong Kong 19.6 -7.1 41.4 -1.7 -21.8 -0.8 Middle East 13.8 1.6 11.7 6.8 2.1 -0.5

a) Countries that have joined the European Union since 2004.Note: Rounding differences mean that aggregate totals may not be exactly equal to the sum of their components. Source: DG of Customs and Excise, unadjusted data.Calculations: Banque de France.

p18


annual report • 2013 sup21

Contents

of statistiCs

1.6 Other services

(EUR billions)

2011 2012 2013

Receipts Payments Balance Receipts Payments Balance Receipts Payments Balance

Manufacturing services on physical inputs owned by others (formerly goods for processing) 5.4 2.5 2.9 6.2 4.9 1.4 6.4 4.8 1.6

Maintenance and repair services n.i.e. 4.3 2.5 1.8 4.9 2.1 2.8 4.6 2.6 2.0

Construction 4.1 2.0 2.1 3.4 2.3 1.1 3.3 2.6 0.7

Insurance and pension services 6.4 3.7 2.7 4.3 3.3 1.0 6.0 6.0 0.1

Financial services 5.7 3.4 2.3 10.0 5.7 4.3 10.0 5.4 4.6

Services giving rise to explicit charges and other financial services 5.7 3.4 2.3 5.5 3.7 1.8 5.5 3.4 2.0Financial intermediation services indirectly measured 4.6 2.0 2.6 4.6 2.0 2.6

Charges for the use of intellectual property n.i.e. 11.0 7.5 3.5 9.9 6.7 3.1 8.7 7.6 1.1

Telecommunications, computer and information services 10.8 10.1 0.7 12.2 11.7 0.5 13.0 14.1 -1.1

Other business services 43.3 42.0 1.3 49.0 48.4 0.5 56.0 54.9 1.2

Research and development services 8.7 10.7 -2.0 9.9 12.1 -2.2 8.3 10.4 -2.1Professional and management consulting services 14.1 12.4 1.7 14.8 13.4 1.3 14.0 14.4 -0.4Technical, trade-related and other business services 20.5 18.8 1.7 24.3 22.9 1.4 33.8 30.0 3.7

Pesonal, cultural and recreational services 3.3 3.4 -0.1 4.0 4.8 -0.7 3.2 4.1 -0.9

General government services n.i.e. 0.9 0.6 0.3 0.7 0.4 0.4 0.9 0.5 0.4

Notes: Rounding differences mean that aggregate totals may not be exactly equal to the sum of their components. n.i.e.: not included elsewhere.

p20



Contents

of statistiCs

1.4 Geographical structure of trade in travel services

(EUR billions)

2011 2012 2013


European Union (28 members) 27.6 17.8 9.8 27.9 18.1 9.9 28.9 18.5 10.4

Economic and Monetary Union (17 members) 21.7 14.6 7.1 22.2 15.4 6.8 22.6 15.4 7.1of which: Germany 6.2 2.0 4.1 6.4 2.4 4.1 7.1 2.6 4.5 Austria 0.3 0.4 -0.1 0.6 0.3 0.3 0.4 0.3 0.1 Belgium 5.3 1.6 3.7 4.9 1.7 3.2 5.0 1.8 3.2 Spain 2.3 4.5 -2.2 2.5 4.8 -2.3 2.1 4.4 -2.3 Greece 0.1 1.1 -1.0 0.1 0.6 -0.5 0.1 0.8 -0.7 Ireland 0.2 0.4 -0.2 0.3 0.4 -0.1 0.3 0.3 0.0 Italy 3.1 2.3 0.7 3.5 2.9 0.6 3.3 3.0 0.4 Luxembourg 0.5 1.1 -0.6 0.4 1.1 -0.7 0.6 1.1 -0.5 Netherlands 3.1 0.3 2.8 2.7 0.3 2.4 2.8 0.3 2.5 Portugal 0.4 0.7 -0.3 0.5 0.5 0.0 0.6 0.6 0.0

Other European Union countries 5.9 3.2 2.7 5.8 2.7 3.1 6.3 3.1 3.3of which: Denmark 0.3 0.1 0.3 0.3 0.1 0.2 0.5 0.1 0.5 Romania 0.2 0.0 0.1 0.1 0.0 0.1 0.2 0.1 0.1 United Kingdom 4.6 2.3 2.3 4.7 1.9 2.8 5.0 2.2 2.8 Sweden 0.3 0.1 0.2 0.3 0.1 0.2 0.3 0.1 0.3

Other industrialised countries (8) 6.7 4.1 2.6 7.9 4.6 3.4 7.7 4.9 2.9of which: Australia 0.6 0.2 0.4 0.8 0.3 0.6 0.8 0.3 0.5 Canada 0.6 0.5 0.1 0.7 0.6 0.2 0.7 0.6 0.0 United States 2.0 1.5 0.5 2.2 1.6 0.6 2.1 1.8 0.3 Japan 0.3 0.1 0.2 0.4 0.2 0.3 0.3 0.1 0.2 Norway 0.3 0.2 0.1 0.3 0.3 0.0 0.3 0.2 0.1 Switzerland 2.9 1.6 1.3 3.5 1.7 1.8 3.5 1.8 1.7

Rest of the world 5.0 10.2 -5.2 6.0 8.5 -2.5 6.0 9.0 -3.0of which: Algeria 0.3 0.1 0.2 0.4 0.2 0.2 0.6 0.2 0.4 Brazil 0.7 0.1 0.6 1.1 0.1 1.0 1.0 0.2 0.8 China 0.5 0.3 0.2 0.6 0.3 0.3 0.6 0.3 0.4 Croatia 0.0 0.3 -0.2 0.0 0.2 -0.2 0.0 0.2 -0.2 Egypt 0.1 0.4 -0.3 0.0 0.2 -0.2 0.0 0.2 -0.1 India 0.1 0.3 -0.2 0.1 0.2 0.0 0.1 0.3 -0.2 Morocco 0.4 0.9 -0.5 0.4 0.7 -0.3 0.3 0.8 -0.5 Mexico 0.2 0.2 0.0 0.2 0.2 0.0 0.2 0.2 0.0 Dominican Republic 0.0 0.4 -0.4 0.0 0.2 -0.2 0.0 0.2 -0.2 Russia 0.4 0.2 0.2 0.5 0.3 0.2 0.5 0.2 0.3 Thailand 0.1 0.2 -0.2 0.1 0.3 -0.2 0.1 0.3 -0.3 Tunisia 0.2 0.8 -0.6 0.3 0.6 -0.4 0.2 0.5 -0.2 Turkey 0.1 1.0 -0.9 0.1 0.6 -0.5 0.1 0.6 -0.5 Vietnam 0.0 0.3 -0.2 0.0 0.2 -0.2 0.0 0.2 -0.2

Total 39.3 32.0 7.3 41.8 31.1 10.7 42.7 32.3 10.4

Note: See “Definition of geographical zones” in Appendix II to The French Balance of Payments and International Investment Position Annual Report, 2013.

p21



Contents

of statistiCs

1.7 Primary income

(EUR billions)

2011 2012 2013


Compensation of employees 15.8 0.9 14.8 16.6 1.0 15.7 17.0 1.2 15.9Investment income 142.5 107.6 35.0 135.3 118.7 16.7 126.4 112.3 14.1Direct investment income 54.4 14.6 39.8 65.0 25.9 39.1 58.5 24.3 34.2

Dividends 46.7 15.7 31.1 48.6 14.5 34.0 43.7 14.3 29.4Reinvested earnings 7.7 -1.1 8.7 11.1 3.5 7.6 10.6 4.1 6.6Interest on intercompany lending na na na 5.3 7.9 -2.6 4.1 5.9 -1.7

Portfolio investment income 68.4 74.4 -6.0 58.5 77.3 -18.7 56.3 73.5 -17.2

of which dividends 9.7 19.9 -10.3 9.6 18.8 -9.2 11.8 19.8 -8.0Other investment income 19.1 18.5 0.5 11.4 15.5 -4.1 11.1 14.5 -3.3

Income from equity securities and investment fund shares/units 0.0 0.0 0.0 0.1 0.0 0.1 0.3 0.0 0.3Interest 19.1 18.5 0.5 11.3 15.5 -4.2 10.8 14.5 -3.6Income attributable to policyholders 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Reserve asset income 0.7 0.1 0.6 0.4 0.0 0.4 0.5 0.1 0.5

Other primary income 11.9 5.7 6.2 11.3 2.9 8.4 11.6 2.3 9.3Total 170.2 114.2 56.0 163.3 122.6 40.7 155.0 115.7 39.3

Notes: Rounding differences mean that aggregate totals may not be exactly equal to the sum of their components. na: not available.

21



Contents

of statistiCs

1.8 Geographical structure of income on outward foreign direct investment (receipts) and on inward foreign direct investment (payments), by the country of residence of the first counterparty

(EUR billions)

Receipts Payments

2010 2011 2012 2013a) 2013 (%)

2010 2011 2012 2013a) 2013 (%)

European Union (28 members) 30.6 21.5 29.2 27.0 46.2 15.7 10.6 19.6 18.1 74.3

Economic and Monetary Union (17 members) 22.3 14.3 20.6 19.5 33.3 12.3 8.2 16.5 15.4 63.6of which: Germany 3.6 3.1 4.5 4.3 7.4 2.4 1.9 3.0 3.0 12.5 Belgium 5.9 4.5 5.2 4.5 7.7 0.0 -3.1 4.2 3.9 16.2 Spain 2.6 1.7 1.0 0.7 1.1 0.9 0.9 0.6 0.6 2.4 Greece -1.1 -2.6 -1.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 Ireland 0.5 -1.0 2.1 1.6 2.8 0.2 0.4 0.2 0.2 0.7 Italy 1.5 0.3 1.4 1.2 2.0 0.6 0.5 0.5 0.5 2.3 Luxembourg 1.4 1.2 1.5 1.8 3.0 1.5 2.3 2.8 2.3 9.5 Netherlands 7.3 6.8 5.5 4.9 8.4 6.6 5.2 5.1 4.7 19.3

Other European Union countries 8.3 7.2 8.6 7.5 12.9 3.5 2.4 3.1 2.6 10.8of which: Poland 0.7 0.9 1.0 0.8 1.3 0.0 0.0 0.0 0.0 0.0 Czech Republic 0.9 0.9 1.0 0.9 1.5 0.0 0.0 0.0 0.0 0.1 Romania 0.3 0.2 0.1 0.1 0.2 0.0 0.0 0.0 0.0 0.0 United Kingdom 5.6 4.7 5.9 5.3 9.0 3.0 2.0 2.5 2.1 8.6 Sweden 0.3 0.1 0.0 0.1 0.1 0.3 0.2 0.3 0.2 0.9

Other industrialised countries (8) 12.5 15.3 15.5 10.9 18.6 5.0 3.8 5.2 5.2 21.2of which: Canada 0.9 0.7 0.8 0.5 0.9 0.0 0.0 0.1 0.2 0.8 United States 6.6 7.4 7.4 4.5 7.7 2.8 1.8 2.5 2.5 10.3 Japan 0.4 1.4 1.4 0.8 1.3 0.3 0.3 0.2 0.2 0.7 Norway 1.4 1.5 1.7 1.5 2.6 0.0 0.0 0.1 0.0 0.2 Switzerland 2.6 3.9 3.9 3.2 5.4 1.9 1.7 2.2 2.2 9.0

Rest of the world 15.1 17.6 20.2 20.6 35.2 1.3 0.2 1.1 1.1 4.5of which: Brazil 2.1 2.1 1.4 1.2 2.0 0.0 0.0 0.0 0.1 0.3 China 1.0 1.3 1.4 0.8 1.3 0.0 0.0 0.0 0.0 0.2 India 0.3 0.2 0.9 0.2 0.3 0.0 0.0 0.0 0.0 -0.1 Indonesia 0.8 1.1 0.2 1.4 2.4 0.0 0.0 0.0 0.0 0.0 Morocco 0.8 0.8 1.0 0.4 0.7 0.0 0.0 0.0 0.0 0.0 Russia 0.5 0.9 1.3 1.2 2.1 0.0 0.0 0.1 0.1 0.5 Singapore 0.6 0.9 1.3 1.0 1.7 0.0 0.0 0.0 0.0 0.1 Turkey 0.3 0.2 0.3 0.2 0.4 0.0 0.0 0.0 0.0 0.0

Total 58.2 54.4 65.0 58.5 100.0 22.0 14.6 25.9 24.3 100.0

a) Interest data for 2013 are derived from data collected from enterprises, whereas dividends and reinvested earnings are estimated.Note: See “Definition of geographical zones” in Appendix II to The French Balance of Payments and International Investment Position Annual Report, 2013.Notes: Rounding differences mean that aggregate totals may not be exactly equal to the sum of their components.

Income on direct investment includes dividends and reinvested earnings. In 2012 and 2013, this income also includes interest on intercompany lending.

25-1



Contents

of statistiCs

2.3 Geographical structure of outward direct investment flows by country of residence of the first counterpartya)

(EUR billions)

2010 2011 2012 2013

European Union (28 members) 13.7 12.4 13.1 12.5

Economic and Monetary Union (17 members) 11.5 10.1 10.4 13.3of which: Germany 0.6 -3.4 -6.0 0.7 Belgium 3.5 10.2 8.3 10.6 Spain 1.8 -4.2 -0.1 3.3 Ireland 1.2 -0.3 -0.3 0.3 Italy -0.2 8.1 2.8 0.1 Luxembourg 2.5 2.3 5.4 1.0 Netherlands 1.6 0.7 -3.7 -2.5

Other European Union countries 2.2 2.3 2.7 -0.7of which: Poland 1.2 -0.3 1.7 -0.3 Czech Republic 0.5 0.0 0.5 0.4 Romania 0.3 0.1 0.0 -0.1 United Kingdom 3.1 4.4 2.7 1.0 Sweden -3.1 -1.6 -1.8 0.0

Other industrialised countries 10.5 10.4 -0.3 -11.2of which: Australia 0.0 -3.3 -0.6 -0.6 Canada -0.7 0.3 -0.2 0.5 United States 4.1 15.7 -2.2 -10.3 Japan -0.9 1.5 -0.1 -1.4 Norway 0.3 -1.8 1.1 1.9 Switzerland 7.8 -2.1 1.8 -1.4

Rest of the world 12.1 15.3 13.6 6.2of which: Angola 0.9 0.6 0.8 0.8 Bahamas -0.4 0.8 -0.1 0.0 Bermuda -0.1 5.1 2.3 0.2 Brazil 3.3 2.7 1.5 1.2 China 1.6 1.6 1.5 1.0 Egypt -0.1 0.1 0.2 -1.3 United Arab Emirates -0.4 -0.7 0.0 -1.1 Hong Kong 1.4 0.5 0.4 0.3 British Virgin Islands 0.0 -0.1 -0.1 -0.1 India 0.9 0.4 0.0 0.5 Kazakhstan -0.3 -2.0 -0.1 -0.1 Morocco 0.7 0.2 0.7 0.8 Nigeria -0.5 1.3 1.0 0.9 Qatar 0.0 0.3 0.0 0.3 Russia 1.5 5.1 2.4 1.9 Singapore 1.1 1.2 -0.6 -0.1 Turkey 0.2 -2.2 0.1 0.1

Total 36.4 38.1 26.4 7.5

a) After restating intercompany lending according to the extended directional principle.Note: See “definition of geographical zones” in Appendix II to the 2013 Annual Report on the French Balance of Payments and International Investment Position.

p25-2



Contents

of statistiCs

2.4 Geographical structure of inward direct investment flows by country of residence of the first counterpartya)

(EUR billions)

2010 2011 2012 2013

European Union (28 members) 3.6 18.6 6.7 4.6

Economic and Monetary Union (17 members) 11.2 15.4 10.0 1.4of which: Germany 2.6 1.1 -0.1 2.8 Belgium -5.4 10.1 7.9 -9.2 Spain -0.8 -0.2 -0.4 1.3 Ireland 1.0 -1.4 -2.5 -1.7 Italy -1.1 -0.1 -2.7 2.2 Luxembourg 11.7 2.6 9.8 4.7 Netherlands 2.6 3.2 -2.2 1.1

Other European Union countries -7.6 3.3 -3.3 3.2of which: Denmark 0.1 -0.2 -0.2 -0.3 Poland -0.5 -1.0 -0.4 0.6 Czech Republic 0.5 0.2 0.0 -0.2 Romania -0.2 0.0 0.3 -0.1 United Kingdom -1.5 2.5 -2.5 2.9 Sweden -1.4 1.5 -0.7 -0.3

Other industrialised countries 5.9 4.0 4.1 6.4of which: Canada -0.1 -0.2 -0.4 0.3 United States 3.8 -1.6 3.3 2.3 Japan -0.1 0.4 0.8 0.3 Switzerland 2.4 5.3 1.0 3.5

Rest of the world 1.0 1.5 1.5 1.7of which: Bermuda 0.0 0.0 0.0 -0.1 Brazil -0.1 0.0 0.0 0.0 China 0.0 0.1 -0.2 -0.3 United Arab Emirates -1.2 1.2 -1.7 3.3 Guernsey 0.2 0.5 0.2 0.2 Hong Kong 0.0 0.1 0.2 -0.2 Isle of Man 0.2 0.2 0.3 0.2 India 0.0 0.0 -0.1 0.0 Jersey 0.3 0.4 0.3 0.2 Lebanon 1.0 0.0 0.2 0.2 Qatar 0.0 0.1 0.3 0.2 Russia 0.2 0.1 1.0 0.1 Singapore -0.1 0.9 -0.6 -0.1 Turkey 0.0 0.0 -0.3 0.2

Total 10.5 24.1 12.3 12.7

a) After restating intercompany lending according to the extended directional principle.Note: See “Definition of geographical zones” in Appendix II to The French Balance of Payments and International Investment Position Annual Report, 2013.

p25-3



Contents

of statistiCs

2.5 Outward direct investment flows by sectora)

(EUR billions)

2010 2011 2012 2013

Agriculture, forestry and fishing 0.1 -0.1 0.1 0.0Mining and quarrying 4.7 5.8 6.0 6.9of which: Extraction of crude petroleum and natural gas 4.9 5.8 6.0 6.9Manufacturing 0.3 28.3 9.2 -1.9of which: Food products and beverages -1.8 5.3 2.9 2.5

Textiles and wearing apparel -1.1 4.3 0.9 2.1Wood, paper, printing and reproduction 0.0 0.2 0.1 0.1Coke and refined petroleum products 0.2 2.0 1.1 1.6Chemicals and chemical products -0.6 2.0 2.7 1.0Pharmaceutical products 4.9 12.5 0.2 -4.5Rubber and plastic products 0.9 0.2 0.0 1.0Basic metals and fabricated metal products -4.2 0.7 -0.1 2.8Computer, electronic and optical products -0.8 -3.1 -1.7 -5.2Machinery and equipment 3.1 1.0 1.0 -2.7Motor vehicles, trailers and semitrailers 1.1 -1.6 1.5 -0.7Other transport equipment 0.1 -0.5 0.7 0.2

Electricity, gas, steam and air conditioning supply 4.9 -2.5 6.0 -1.7Water supply, sewerage, waste management and remediation activities -0.3 -0.2 -4.4 -0.2of which: Water collection, treatment and supply -0.1 0.1 -2.7 0.5Construction 0.4 0.3 0.1 -2.8Wholesale and retail trade, repair of motor vehicles and motorcycles 3.5 -3.7 -1.4 2.3of which: Wholesale trade 0.0 -1.5 1.9 0.9

Retail trade 3.3 -2.3 -4.1 1.4Transport and storage 1.1 -0.4 -0.2 -1.2of which: Land transport and transport via pipeline 0.5 -0.1 -0.6 -0.7

Water transport -0.2 0.0 -0.1 -0.1Air transport 0.4 0.1 0.1 -0.2Warehousing and support activities for transportation 0.4 -0.5 0.5 -0.2

Accommodation and food service activities -1.8 0.7 0.0 -0.4Information and communication -2.2 -3.8 -0.1 -1.9of which: Motion pictures, video and television programme activities -2.7 -4.1 -1.9 -4.9

Telecommunications 0.4 0.0 -0.3 3.1Financial and insurance activities 16.7 10.5 8.2 3.2of which: Financial intermediation, except insurance and pension funding 17.1 2.1 10.1 2.8

of which activities of holding companies 0.1 5.7 -1.0 -2.3Insurance -0.1 0.2 -0.6 0.4

Real estate activitiesb) 4.0 1.1 3.1 3.2Professional, scientific and technical activities 4.7 1.7 5.1 2.2of which: Legal and accounting activities -0.3 0.0 0.1 0.2

Activities of head offices; management consultancy activities 4.1 0.6 4.7 2.7Architectural and engineering activities; technical testing and analysis 0.9 0.1 0.3 -0.6Scientific research and development 0.1 0.1 0.1 0.1Advertising and market research 0.2 0.9 0.2 -0.1

Administrative and support service activities 0.0 -2.7 1.2 -0.3Education 0.0 0.0 0.0 0.0Human health and social work activities 0.0 0.2 -0.1 -0.2Arts, entertainment and recreation -0.2 0.0 0.0 0.1Other service activities 0.1 0.1 0.0 0.1Amounts not allocated 0.3 3.0 -6.4 0.1

Total 36.4 38.1 26.4 7.5

a) The structure of foreign direct investment stocks and flows by sector is determined according to the “NAF rév. 2” classification of activities. Intercompany loans included in these statistics were calculated according to the extended directional principle.b) This item includes the foreign investment of resident enterprises belonging to the real estate sector, as well as net purchases of foreign real estate assets in the strictest sense.Note: Holding companies belonging to listed groups have been classified according to the main activity of their group.

p25-4



Contents

of statistiCs

2.6 Inward direct investment flows by sectora)

(EUR billions)

2010 2011 2012 2013

Agriculture, forestry and fishing 0.0 0.0 0.1 0.0Mining and quarrying -0.6 0.1 0.4 1.8of which: Extraction of crude petroleum and natural gas -0.5 0.1 0.2 1.8Manufacturing 3.7 -2.0 8.9 -2.7of which: Food products and beverages 0.0 -2.1 -2.2 1.9

Textiles and wearing apparel -0.3 2.3 0.3 0.2Wood, paper, printing and reproduction 0.5 -0.1 0.8 -1.4Coke and refined petroleum products 0.0 -0.5 -0.2 0.5Chemicals and chemical products 0.5 1.1 1.1 -0.6Manufacture of pharmaceutical products 5.8 3.9 3.2 -1.4Rubber and plastic products -0.6 0.0 0.1 -0.1Basic metals and fabricated metal products -3.6 -1.0 2.9 0.2Computer, electronic and optical products -0.1 0.2 1.3 -1.8Machinery and equipment 1.5 -0.7 0.0 0.9Motor vehicles, trailers and semitrailers 0.0 -0.2 -0.1 0.1Other transport equipment -0.7 -0.3 -0.1 0.3

Electricity, gas, steam and air conditioning supply 0.5 1.6 -0.7 -0.1Water supply, sewerage, waste management and remediation activities -0.1 0.0 0.0 0.2of which: Water collection, treatment and supply 0.0 0.0 0.0 0.0Construction -2.0 1.2 -0.2 -0.4Wholesale and retail trade, repair of motor vehicles and motorcycles -0.4 3.7 1.7 2.3of which: Wholesale trade -0.6 2.2 -0.8 0.3

Retail trade 0.6 1.4 2.4 1.9Transport and storage 0.4 1.0 1.3 0.6of which: Land transport and transport via pipeline 0.2 0.8 0.5 0.2

Water transport 0.7 0.1 0.0 0.1Air transport 0.1 0.0 0.0 0.0Warehousing and support activities for transportation -0.5 0.0 0.9 0.3

Accommodation and food service activities -0.4 0.2 -0.8 -0.2Information and communication -0.2 -7.6 0.1 2.1of which: Motion pictures, video and television programme activities -0.2 0.0 0.4 0.0

Telecommunications 0.0 -7.9 -1.6 2.2Financial and insurance activities 1.0 15.7 -0.8 2.9of which: Financial intermediation, except insurance and pension funding -1.1 4.4 -1.1 1.8

of which activities of holding companies 1.2 9.4 2.5 3.1Insurance 0.9 1.2 -2.2 0.2

Real estate activitiesb) 7.2 7.0 9.1 4.8Professional, scientific and technical activities 3.7 2.2 -0.2 0.0of which: Legal and accounting activities 0.0 0.1 0.1 0.1

Activities of head offices; management consultancy activities 3.6 1.4 -0.2 -0.1Architectural and engineering activities; technical testing and analysis -0.2 0.3 -0.1 0.0Scientific research and development 0.3 0.3 0.0 0.1Advertising and market research 0.0 0.1 -0.1 -0.2

Administrative and support service activities -1.8 -0.6 1.8 -0.2Education -0.5 0.7 0.0 0.1Human health and social work activities 0.1 0.7 0.8 -0.1Arts, entertainment and recreation 0.0 0.1 0.1 0.1Other service activities 0.0 0.0 0.0 0.0Amounts not allocated 0.1 0.1 -9.2 1.5

Total 10.5 24.1 12.3 12.7

a) The structure of foreign direct investment stocks and flows by sector is determined according to the “NAF rév. 2” classification of activities. Intercompany loans included in these statistics were calculated according to the extended directional principle.b) This item includes investment of non-resident enterprises in the real estate sector as well as non-residents’ net purchases of real estate assets in the strictest sense in France.Note: Holding companies belonging to listed groups have been classified according to the main activity of their group.

p 32

p 33



Contents

of statistiCs

5.6 Stocks of outward direct investment at book value by country of residence of the first counterpartya)

(EUR billions)

2010b) 2011b) c) 2012b) 2013d) 2013(%)

European Union (28 members) 503.9 537.5 555.1 565.5 60.0Economic and Monetary Union (17 members) 393.3 421.7 432.9 445.9 47.3of which: Germany 51.8 57.3 51.2 52.0 5.5 Belgium 123.1 133.3 141.1 151.5 16.1 Spain 36.9 36.5 35.0 38.3 4.1 Ireland 15.6 18.4 17.8 18.0 1.9 Italy 33.2 39.3 41.2 41.3 4.4 Luxembourg 32.4 37.5 41.2 42.2 4.5 Netherlands 88.6 90.6 92.2 89.6 9.5Other European Union countries 110.6 115.8 122.2 119.6 12.7of which: Denmark 1.1 1.5 1.8 0.7 0.1 Poland 10.4 10.6 13.1 12.6 1.3 Czech Republic 6.0 5.9 6.6 6.6 0.7 Romania 3.2 3.9 4.0 3.8 0.4 United Kingdom 80.6 85.6 88.8 88.0 9.3 Sweden 4.5 4.0 3.4 3.3 0.4

Other industrialised countries 221.2 255.4 246.9 221.7 23.5of which: Australia 6.7 7.1 7.1 5.3 0.6 Canada 7.6 10.2 10.1 9.5 1.0 United States 146.0 174.0 165.0 147.8 15.7 Japan 16.3 20.2 17.9 12.9 1.4 Switzerland 38.8 40.0 41.9 40.1 4.3

Rest of the world 127.6 149.6 160.5 155.2 16.5of which: South Africa 1.3 1.3 1.1 1.0 0.1

Algeria 1.7 2.1 2.2 2.1 0.2 Angola 5.4 6.0 6.7 7.6 0.8 Saudi Arabia 1.8 1.5 2.2 2.1 0.2 Argentina 1.8 2.3 2.6 2.3 0.2 Bermuda 2.5 3.8 6.3 6.3 0.7 Brazil 22.4 26.2 25.2 22.3 2.4 China 11.0 16.1 17.2 17.9 1.9 Congo 2.5 2.6 2.6 1.9 0.2 South Korea 2.7 3.1 3.4 3.3 0.4 Egypt 4.1 4.1 4.2 2.3 0.2 United Arab Emirates 0.9 0.3 0.3 -0.8 -0.1 Hong Kong 5.5 6.2 6.3 6.4 0.7 India 3.1 3.4 3.3 3.3 0.3 Indonesia 1.5 1.9 2.0 1.1 0.1 Israel 1.7 2.0 2.0 2.3 0.2 Jersey 1.3 1.3 1.2 1.2 0.1 Kazakhstan 2.9 -0.1 -0.2 -0.3 0.0 Morocco 8.8 9.0 9.6 10.3 1.1 Mexico 1.4 1.5 1.9 2.2 0.2 Nigeria 4.2 5.7 6.7 7.3 0.8 Qatar 1.2 1.7 1.7 1.9 0.2 Russia 6.3 7.9 10.0 10.9 1.2 Singapore 5.2 7.5 8.1 7.5 0.8 Thailand 1.4 1.6 2.0 2.0 0.2 Turkey 6.1 3.2 3.6 3.0 0.3 Ukraine 0.8 0.7 0.9 0.7 0.1

Venezuela 1.4 1.3 1.4 1.6 0.2

Total 852.7 942.6 962.6 942.5 100.0

a) Intercompany lending and trade credits included in these statistics were calculated according to the extended directional principle.b) Revised data.c) As of the end of 2011, stocks include intercompany trade credits, which were formerly included in “other investment”.d) Estimated from stocks at book value at the end of 2012 and direct investment flows in 2013.Notes: Rounding differences mean that aggregate totals may not be exactly equal to the sum of their components.Note: See “Definition of geographical zones” in Appendix II to The French Balance of Payments and International Investment Position Annual Report, 2013.

p32-2

p33-2



Contents

of statistiCs

5.7 Stocks of inward direct investment at book value by country of residence of the first counterpartya)

(EUR billions)

2010b) 2011b) c) 2012b) 2013d) 2013(%)

European Union (28 members) 335.1 384.5 386.4 391.9 73.7Economic and Monetary Union (17 members) 282.1 322.4 325.5 327.9 61.6of which: Germany 48.4 57.9 57.1 59.9 11.3 Belgium 40.0 53.8 59.7 51.2 9.6 Spain 16.0 17.8 17.8 19.1 3.6 Ireland 7.6 7.8 2.4 0.6 0.1 Italy 15.3 17.7 15.0 17.2 3.2 Luxembourg 69.7 78.1 84.0 88.8 16.7 Netherlands 80.4 85.0 85.8 86.9 16.3Other European Union countries 53.0 62.1 60.8 64.1 12.0of which: Denmark 6.0 5.8 5.6 5.4 1.0 Poland -0.7 -1.4 -2.0 -1.3 -0.2 Czech Republic 0.8 1.1 1.2 0.9 0.2 Romania 0.0 0.0 0.2 0.2 0.0 United Kingdom 44.0 51.8 51.8 54.8 10.3 Sweden 2.8 4.5 3.6 3.4 0.6

Other industrialised countries 97.2 107.7 110.5 116.7 21.9of which: Australia 0.4 0.6 0.2 0.1 0.0 Canada 2.9 2.4 2.4 2.7 0.5 United States 53.5 55.4 60.4 62.4 11.7 Japan 9.6 11.0 10.1 10.4 2.0 Switzerland 29.2 36.5 36.3 39.8 7.5

Rest of the world 13.4 22.9 22.4 23.4 4.4of which: Algeria 0.2 0.1 0.1 0.1 0.0 Netherlands Antilles 0.8 0.0 0.0 0.0 0.0 Saudi Arabia 0.5 0.7 0.6 0.6 0.1 Bermuda 0.7 0.4 0.4 0.3 0.1 Brazil 0.1 0.1 0.0 0.0 0.0 China 0.0 1.7 1.4 1.1 0.2 South Korea 0.0 0.4 0.5 0.5 0.1 Egypt 0.0 0.0 0.1 0.0 0.0 United Arab Emirates 2.3 3.5 1.6 4.9 0.9 Gabon 0.7 0.6 0.6 0.5 0.1 Hong Kong 1.0 1.8 1.8 1.6 0.3 Isle of Man 0.2 0.4 0.5 0.7 0.1 British Virgin Islands 0.2 0.1 0.1 0.5 0.1 India 0.2 0.3 0.2 0.2 0.0 Israel 0.1 0.1 0.1 0.1 0.0 Jersey 0.3 0.6 0.9 1.0 0.2 Lebanon 2.1 2.1 2.2 2.4 0.5 Morocco 0.1 0.2 0.3 0.3 0.1 Mexico 0.0 0.0 0.0 0.0 0.0 Qatar 0.5 1.0 1.4 1.6 0.3 Russia 0.3 0.3 0.5 0.6 0.1 Singapore 0.4 1.6 0.8 0.7 0.1 Thailand 0.0 0.0 0.0 0.0 0.0 Turkey -0.1 0.2 -0.1 0.1 0.0

Total 445.7 515.1 519.3 532.0 100.0

a) Intercompany lending and trade credits included in these statistics were calculated according to the extended directional principle.b) Revised data.c) As of the end of 2011, stocks include intercompany trade credits, which were formerly included in “other investment”.d) Estimates based on book value of stocks at the end of 2012 and direct investment flows in 2013.Notes: Rounding differences mean that aggregate totals may not be exactly equal to the sum of their components.Note: See “Definition of geographical zones” in Appendix II to The French Balance of Payments and International Investment Position Annual Report, 2013.

p32-3



Contents

of statistiCs

5.8 Outward direct investment at book value by sectora)

(EUR billions)

2010 2011 2012 2013b) 2013 (%)

Agriculture, forestry and fishing 0.3 0.1 0.2 0.2 0.0Mining and quarrying 43.2 49.2 54.9 55.9 5.9of which: Extraction of crude petroleum and natural gas 43.2 49.2 54.9 55.9 5.9Manufacturing 213.0 245.0 254.1 241.0 25.6of which: Food products and beverages 29.0 31.1 36.3 36.4 3.9 Textiles and wearing apparel 6.4 6.7 7.4 8.9 0.9 Wood, paper, printing and reproduction 2.2 2.4 2.5 2.5 0.3 Coke and refined petroleum products 9.6 10.7 13.1 14.2 1.5 Chemicals and chemical products 17.6 21.8 24.2 23.3 2.5 Pharmaceutical products 31.1 46.9 44.0 38.6 4.1 Rubber and plastic products 8.7 10.1 10.2 10.4 1.1 Basic metals and fabricated metal products 3.4 4.2 4.1 7.0 0.7 Computer, electronic and optical products 23.0 19.4 17.7 14.4 1.5 Machinery and equipment 17.2 17.3 17.5 14.0 1.5 Motor vehicles, trailers and semitrailers 27.9 30.2 31.7 28.7 3.0 Other transport equipment 6.0 5.3 6.4 6.2 0.7Electricity, gas, steam and air conditioning supply 64.0 66.3 72.8 69.5 7.4Water supply, sewerage, waste management and remediation activities 10.1 10.2 8.5 9.2 1.0of which: Water collection, treatment and supply 8.8 8.8 6.7 7.1 0.8Construction 23.9 24.5 24.3 20.4 2.2Wholesale and retail trade, repair of motor vehicles and motorcycles 61.7 59.3 57.7 58.5 6.2of which: Wholesale trade 25.5 28.6 29.7 29.4 3.1 Retail trade 33.0 27.6 24.0 25.3 2.7Transport and storage 7.8 7.9 8.0 7.1 0.8of which: Land transport and transport via pipeline 2.1 2.1 1.3 0.8 0.1 Water transport 0.4 0.5 0.4 0.3 0.0 Air transport 2.0 2.2 2.3 2.2 0.2 Warehousing and support activities for transportation 3.3 3.1 4.0 3.8 0.4Accommodation and food service activities 8.2 8.6 8.6 7.9 0.8Information and communication 76.3 72.2 71.3 66.7 7.1of which: Motion pictures, video and television programme activities 26.7 22.8 22.4 16.8 1.8 Telecommunications 35.9 34.9 33.0 34.8 3.7Financial and insurance activities 243.9 257.5 258.8 249.4 26.5of which: Financial intermediation, except insurance

and pension funding 152.4 151.4 156.4 151.8 16.1of which activities of holding companies 22.5 30.5 28.5 23.9 2.5Insurance 58.8 60.3 58.7 56.5 6.0

Real estate activitiesc) 44.8 44.8 46.3 48.8 5.2Professional, scientific and technical activities 43.8 47.2 52.2 52.7 5.6of which: Legal and accounting activities 0.8 0.8 0.9 0.9 0.1 Activities of head offices;

management consultancy activities 20.0 22.0 27.7 29.9 3.2 Architectural and engineering activities;

technical testing and analysis 13.5 13.4 12.6 11.3 1.2 Scientific research and development 0.4 0.6 0.7 0.7 0.1 Advertising and market research 9.3 10.5 10.7 10.4 1.1Administrative and support service activities 5.5 2.8 4.1 3.8 0.4Education 0.1 0.1 0.1 0.1 0.0Human health and social work activities 0.6 0.8 0.8 0.6 0.1Arts, entertainment and recreation 0.3 0.3 0.2 0.3 0.0Other service activities 0.1 0.2 0.2 0.3 0.0Amounts not allocatedd) 5.1 45.8 39.3 50.1 5.3

Total 852.7 942.6 962.6 942.5 100.0

a) The structure of foreign direct investment stocks and flows by sector is determined according to the “NAF rév. 2” classification of activities. Intercompany loans included in these statistics were calculated according to the extended directional principle.b) Estimates based on stocks at book value at the end of 2012 and direct investment flows in 2013.c) This item covers stocks of resident real estate companies’ foreign investments, as well as the stocks of real estate in the strictest sense owned abroad.d) Since 2011, part of the stock of intercompany lending is based on extrapolated data and is not broken down by sector.Note: Holding companies belonging to listed groups have been classified according to the main activity of their group.

p32-4



Contents

of statistiCs

5.9 Inward direct investment at book value by sectora)

(EUR billions)

2010 2011 2012 2013b) 2013 (%)

Agriculture, forestry and fishing 0.3 0.3 0.4 0.4 0.1Mining and quarrying 0.2 0.1 0.4 2.2 0.4of which: Extraction of crude petroleum and natural gas 0.0 0.0 0.2 2.0 0.4Manufacturing 118.9 117.6 124.4 120.1 22.6of which: Food products and beverages 19.5 21.1 19.6 20.9 3.9

Textiles and wearing apparel 1.9 1.5 1.9 2.1 0.4Wood, paper, printing and reproduction 4.5 4.6 5.0 3.6 0.7Coke and refined petroleum products -0.1 0.9 0.6 1.1 0.2Chemicals and chemical products 11.9 12.3 13.4 12.2 2.3Pharmaceutical products 22.3 24.5 27.7 25.3 4.8Rubber and plastic products 1.8 1.6 1.7 1.6 0.3Basic metals and fabricated metal products 4.5 5.0 6.6 7.3 1.4Computer, electronic and optical products 6.4 6.2 6.9 5.1 1.0Machinery and equipment 1.3 0.0 -0.1 0.8 0.1Motor vehicles, trailers and semitrailers 7.6 7.0 6.9 7.0 1.3Other transport equipment 9.6 8.5 8.1 8.3 1.6

Electricity, gas, steam and air conditioning supply 5.0 5.0 4.6 4.8 0.9Water supply, sewerage, waste management and remediation activities 0.3 0.3 0.3 0.4 0.1of which: Water collection, treatment and supply 0.1 0.1 0.0 0.0 0.0Construction 6.1 7.0 6.7 6.3 1.2Wholesale and retail trade, repair of motor vehicles and motorcycles 15.3 27.7 26.3 28.8 5.4

of which: Wholesale trade 3.1 13.1 10.7 11.2 2.1Retail trade 11.7 12.0 12.8 14.8 2.8

Transport and storage 4.9 6.3 6.7 7.2 1.3of which: Land transport and transport via pipeline 2.6 3.4 3.8 3.9 0.7

Water transport 1.0 1.3 1.2 1.2 0.2Air transport 0.2 0.2 0.1 0.2 0.0Warehousing and support activities for transportation 1.4 1.3 1.6 1.9 0.4

Accommodation and food service activities 5.7 4.8 4.3 4.3 0.8Information and communication 20.3 11.8 12.5 14.4 2.7of which: Motion pictures, video and television programme activities 1.9 1.5 1.9 1.8 0.3

Telecommunications 8.9 0.5 0.3 2.7 0.5Financial and insurance activities 129.5 142.2 142.9 143.0 26.9of which: Financial intermediation, except insurance

and pension funding 45.5 50.2 46.5 46.5 8.7of which activities of holding companies 52.5 60.5 61.8 64.5 12.1Insurance 17.5 17.5 21.2 20.6 3.9

Real estate activities c) 99.1 102.7 107.6 112.7 21.2Professional, scientific and technical activities 24.9 26.1 25.7 25.7 4.8of which: Legal and accounting activities 0.5 0.5 0.7 0.7 0.1

Activities of head offices; management consultancy activities 19.4 20.6 20.0 20.3 3.8Architectural and engineering activities; technical testing and analysis 2.1 2.3 2.5 2.4 0.5Scientific research and development 2.0 1.7 1.5 1.5 0.3Advertising and market research 0.9 0.8 1.0 0.7 0.1

Administrative and support service activities 10.7 8.0 9.2 8.9 1.7Education 0.4 1.1 0.9 1.0 0.2Human health and social work activities 1.2 1.1 2.9 2.8 0.5Arts, entertainment and recreation 0.8 0.8 0.9 1.0 0.2Other service activities 0.0 0.0 0.0 0.0 0.0Amounts not allocatedd) 2.0 52.0 42.5 47.7 9.0

Total 445.7 515.1 519.3 531.8 100.0

a) The structure of foreign direct investment stocks and flows by sector is determined according to the “NAF rév. 2” classification of activities. Intercompany loans included in these statistics were calculated according to the extended directional principle.b) Estimates based on book value of stocks at the end of 2012 and direct investment flows in 2013.c) This item includes non-residents’ investment in the real estate sector as well as real estate assets in the strictest sense owned in France by non-residents.d) Since 2011, part of the stock of intercompany lending is based on extrapolated data and is not broken down by sector.Note: Holding companies belonging to listed groups have been classified according to the main activity of their group.

p35



Contents

of statistiCs

5.2 The French international investment position from end 2012 to end 2013 (direct investment estimated at mixed value)

(EUR billions)

Stocks end 2012

Balanceof payments

flows2013a)

Changes attributable to changes in exchange rates, market prices and other adjustmentsa)

Total variations between end 2011 and end 2013a)

Stocks end 2013

Total Exchange rate change

Change in market

prices

Other adjustments

1 2 3 4 = (2 + 3) 5 = (1 + 4)

Direct investment at mixed value 427.3 -5.1 -33.5 -31.3 -5.3 3.1 -38.6 388.7

Abroad 965.9 7.5 -2.6 -31.1 13.4 15.1 4.9 970.8Equity capital 918.0 9.1 -1.4 -29.4 13.4 14.6 7.7 925.7Other transactions (intercompany lending)b) 48.0 -1.6 -1.2 -1.7 0.0 0.5 -2.8 45.1

Inward 538.6 12.7 30.9 0.1 18.8 12.0 43.5 582.1Equity capital 462.0 17.5 30.8 0.0 18.8 12.1 48.3 510.4Other transactions (intercompany lending)b) 76.6 -4.9 0.0 0.1 0.0 -0.1 -4.8 71.8

Portfolio investment -621.1 -69.8 -33.7 -16.3 13.3 -30.7 -103.5 -724.6

Foreign securities 1,991.0 66.3 37.4 -38.5 74.8 1.1 103.7 2,094.7Equity securities and investment fund shares/units 495.4 48.8 54.3 -16.7 72.2 -1.3 103.1 598.4Bonds and notes 1,270.7 36.3 -3.0 -7.4 1.7 2.7 33.3 1,304.0Short-term debt securities 224.9 -18.8 -13.9 -14.5 0.9 -0.3 -32.7 192.2

Domestic securities 2,612.1 136.1 71.1 -22.2 61.5 31.8 207.2 2,819.3Equity securities and investment fund shares/units 593.1 26.1 96.8 -2.3 91.7 7.4 122.9 715.9Bonds and notes 1,816.0 82.0 -28.8 -18.1 -30.6 19.9 53.2 1,869.2Short-term debt securities 203.0 28.0 3.1 -1.8 0.5 4.5 31.1 234.1

Memorandum item: Treasury securities 978.3 73.2 -9.5 0.0 -28.7 19.2 63.7 1,042.0

Financial derivatives -45.2 -16.8 -3.1 2.2 -5.3 0.0 -19.9 -65.1

Assets 1,080.2 -216.1 -59.5 -23.1 -36.4 0.0 -275.6 804.7Liabilities 1,125.4 -199.3 -56.3 -25.3 -31.0 0.0 -255.7 869.8

Other investment (excluding reserve assets) -137.1 79.0 3.3 1.7 0.0 1.6 82.3 -54.8Other equity 26.4 6.4 0.0 0.0 0.0 0.0 6.1 32.6

Banque de France 1.5 0.0 0.0 0.0 0.0 0.0 0.0 1.5General government 24.9 6.4 -0.2 -0.4 0.0 0.1 6.1 31.0

Currency and deposits -139.4 20.9 -1.6 4.4 0.0 -6.0 19.3 -120.1Banque de France -51.1 30.9 -25.8 -3.5 0.0 -22.3 5.1 -46.0General government -17.5 3.3 2.6 0.0 0.0 2.6 5.9 -11.6Monetary financial institutions -332.8 15.0 23.3 8.7 0.0 14.6 38.2 -294.5Other sectorsc) 261.9 -28.2 -1.7 -0.8 0.0 -0.9 -29.9 232.0

Loans -0.1 52.2 4.6 -3.4 0.0 8.0 56.8 56.6Banque de France -120.8 13.4 28.4 6.1 0.0 22.3 41.9 -78.9General government 17.3 2.4 -2.6 0.0 0.0 -2.6 -0.2 17.1Monetary financial institutions 370.0 14.1 -24.9 -10.1 0.0 -14.7 -10.8 359.2Other sectorsc) -266.6 22.3 3.6 0.6 0.0 3.0 25.9 -240.7

Trade credits and advances -12.2 -1.6 0.0 0.7 0.0 -0.7 -1.6 -13.8Other accounts payable/receivable 0.0 1.2 0.1 0.0 0.0 0.1 1.3 1.3

Monetary financial institutions -0.1 1.5 0.1 0.0 0.0 0.1 1.5 1.5Other sectorsc) 0.1 -0.3 0.0 0.0 0.0 0.0 -0.3 -0.2

Special drawing rights -11.8 0.0 0.5 0.5 0.0 0.0 0.5 -11.3

Reserve assets 139.9 -1.5 -33.3 -33.3 0.0 0.0 -34.8 105.1

Balance -236.2 -14.2 -100.3 -77.0 2.6 -26.0 -114.5 -350.7

(% of GDP) -11.3 -16.6

a) BPM6 sign conventions: No sign means an increase in assets and in liabilities; (-) sign means a decrease in assets and in liabilities.b) After restating intercompany lending according to the extended directional principle.c) Non-financial corporations, insurance companies, other financial intermediaries, investment funds other than money market funds, clearing houses. Note: Direct investment is recorded according to the extended directional principle.

p35



Contents

of statistiCs

5.17 Resident MFIs’ loan-deposit position in euro and foreign currencies (excluding the central bank)

(EUR billions)

2011 2012 2013

Assets Liabilities Net Assets Liabilities Net Assets Liabilities Net

Euro 756.6 766.7 -10.1 715.9 664.8 51.1 649.5 619.5 30.0

Vis-à-visthe euro area 424.3 304.2 120.1 389.6 275.6 114.0 359.7 250.1 109.6

Vis-à-vis countriesoutside the euro area 332.3 462.5 -130.2 326.3 389.2 -62.9 289.8 369.4 -79.6

Foreign currencies 460.7 368.1 92.6 382.7 396.8 -14.1 447.7 411.6 36.1

Vis-à-visthe euro area 45.2 48.9 -3.7 40.5 57.5 -17.0 37.5 61.4 -24.0

Vis-à-vis countriesoutside the euro area 415.4 319.3 96.1 342.2 339.3 2.9 410.2 350.2 60.0

Total 1,217.2 1,134.9 82.3 1,098.6 1,061.5 37.1 1,097.2 1,031.1 66.1

5.18 Resident MFIs’ loan-deposit positions by counterparty’s sector (excluding the central bank)

(EUR billions)

2011 2012 2013

Assets Liabilities Net Assets Liabilities Net Assets Liabilities Net

Interbank 845.2 794.8 50.4 740.9 715.6 25.3 734.7 685.1 49.6

Euro 544.2 526.5 17.7 514.0 432.7 81.4 456.1 398.4 57.7Foreign currencies 301.0 268.3 32.7 226.8 282.9 -56.1 278.6 286.7 -8.2

Financial and non-financial customers

372.0

339.9

31.9

357.7

345.9

11.8

362.5

346.0

16.5

Euro 212.4 240.2 -27.8 199.1 232.7 -33.6 193.4 221.1 -27.7Foreign currencies 159.6 99.9 59.7 158.7 113.2 45.4 169.1 124.9 44.2

Total 1,217.2 1,134.9 82.3 1,098.6 1,061.5 37.1 1,097.2 1,031.1 66.1

p 36



Contents

of statistiCs

5.21 The Banque de France’s assets and liabilities vis-à-vis non-residents (excluding banknotes and coins)

(EUR billions)

Stocks at end of year Variation 2013

2011 2012 2013

Assets 325.1 328.1 273.6 -54.5

Investment in institutional customers’ securities 145.9 138.7 145.2 6.5Securities issued by euro area residents outside France 83.8 82.2 88.2 6.0

Euro 79.0 78.7 84.7 6.0Foreign currencies 4.8 3.5 3.5 0.0

Securities issued by non-residents of the euro area 62.1 56.5 57.0 0.5Euro 3.6 2.7 2.0 -0.7Foreign currencies 58.5 53.8 55.0 1.2

Other assets 46.1 49.5 23.3 -26.2

Other claims on euro area residents outside France 7.2 2.6 1.5 -1.1Euro 6.8 1.9 0.8 -1.1Foreign currencies 0.4 0.7 0.7 0.0

Other claims on non-residents of the euro area 29.4 37.2 12.1 -25.1Euro 6.7 4.2 4.6 0.4Foreign currencies 22.7 33.0 7.5 -25.5

Claim on the ECB for transferred reserve assets 8.2 8.2 8.2 0.0

Equity in the ECB 1.3 1.5 1.5 0.0

Reserve assets 133.1 139.9 105.1 -34.8

Liabilities 235.0 231.7 158.0 -73.7Liabilities toward the ESCB (TARGET) 77.4 54.8 16.2 -38.6Allocation of special drawing rightsa) 12.0 11.8 11.3 -0.5Deposits of foreign institutional customers 145.6 165.1 130.5 -34.6

Euro 18.7 35.6 28.0 -7.6Foreign currencies 126.9 129.5 102.5 -27.0

Position 90.1 96.4 115.6 19.2

of which international investment position excluding reserve assets -43.0 -43.5 10.5 54.0

a) Allocations of special drawing rights are a component of France’s international investment position, according to the BPM6.

20 13 annual report the french balance of payments … · balance of payments directorate sectoral...

Documents