The seasonally adjusted trade deficit widened out from November's unrevised €5.94 billion to €6.83 billion at year-end.

The deterioration reflected the relative strength of imports which rose 2.6 percent on the month, more than double the 1.1 percent advance posted by exports. Even so, over the quarter as a whole, exports (minus 1.7 percent) fell by less than imports (minus 3.3 percent) allowing the shortfall to narrow from €24.51 billion in July-September to €20.54 billion. Consumer goods even moved into a surplus for the first time in three years although the balances on both intermediates and capital goods remained in the red.

The December data leave intact an improving trend in the overall trade deficit but this masks ongoing weakness in exports.

The merchandise trade balance measures the difference between imports and exports of goods. The level of the international trade balance, as well as changes in exports and imports, indicate trends in foreign trade and can offer a guide to an economy's competitiveness.

Changes in the level of imports and exports, along with the difference between the two (the trade balance) are a valuable gauge of economic trends here and abroad. While these trade figures can directly impact all financial markets, they primarily affect currency values in foreign exchange markets. Given the size of the French economy, the euro can be sensitive to changes in the trade balance. The bond market is also sensitive to the risk of importing inflation. This report gives a breakdown of trade with major countries as well, so it can be instructive for investors who are interested in diversifying globally. For example, a trend of accelerating exports to a particular country might signal economic strength and investment opportunities in that country.