PARIS, Nov 9: France’s economy was hit on Friday with news of a widening trade deficit in September, as energy sector imports rose, and a slide in industrial production that called growth forecasts for this year into doubt.

As imports rose -- notably of energy products -- and the value of exports fell, France’s trade gap with the rest of the world expanded 13.5pc to 3.083bn euros ($4.5bn) in September from August, said the customs authority.

But the shortfall narrowed to 9.117 billion euros in the third quarter from 9.453 billion euros in the previous three months.

The deficit in the first nine months of the year came to a seasonally corrected 26.058 billion euros, up 27.5 per cent from the same period of 2006.

In addition to more costly energy, the rapidly rising euro, which tends to dampen the competitiveness of eurozone products marketed abroad, was also cited by analysts for the expanding trade shortfall.

“The level of the euro against the dollar is partly responsible for this situation,” said Alberto Balboni of the research group Xerfi.

The euro this week surged to record highs against the dollar, passing above the $1.47 level.

Separately, the national statistics institute INSEE announced that industrial production in France slowed in September, falling 1.1 per cent after having been stable in August.

Manufacturing output, which excludes the food and energy sectors, declined 1.3 per cent in September.

Alexander Law, also with Xerfi, warned that the French economy was in for a rough ride in the final quarter of 2007.

“What is certain is that it will be almost impossible to meet the 2 per cent growth target this year set by the government,” he said, predicting momentum limited to 1.8 per cent.

At BNP-Paribas, economist Mathieu Kaiser also forecast a difficult end to the year.

He cited a weaker US economy and “tighter credit conditions” stemming from a downturn in the US housing market, which has undermined the value of mortgage-backed securities held by banks around the world.

“Record high oil prices should also dampen activity” as well as a rapidly appreciating euro “that is starting to have an impact on foreign orders,” he added. —AFP