The seasonally adjusted trade deficit weighed in at €7.39 billion in January, up from a smaller revised €6.42 billion in December and a 3-month high.

The deterioration reflected a 3.1 percent monthly fall in exports that easily eclipsed a 1.1 percent drop in imports. Exports now stand at their weakest level since May 2022 while imports saw just a 2-month low. That said, at minus 3.0 percent, annual growth of the former remains well above that of the latter (minus 13.1 percent).

Total net trade added some 0.9 percentage points to quarterly GDP growth at the end of 2023 but is unlikely to get anywhere close to that mark in the current period. Domestic demand will have to improve if the economy is to continue to expand.

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.