| Actual | Previous | Revised | |
|---|---|---|---|
| Balance | €-7.99B | €-7.58B | €7.56B |
Highlights
In May, France's merchandise trade balance worsened by 0.43 billion euros, bringing the deficit to 7.99 billion euros. Despite a modest rise in exports by 0.2 billion euros to 51.5 billion euros, imports surged by 0.8 billion euros to 58.3 billion euros, outpacing export growth.
The energy sector was a significant drag on the trade balance, deteriorating by 0.3 billion euros due to higher volumes of imported energy products. Consumer goods saw a slight decline of 0.1 billion euros but remained in surplus, indicating resilient domestic demand. However, capital goods and intermediate goods both faced setbacks, with their balances worsening by 0.3 billion euros and 0.1 billion euros, respectively.
The data suggest that while France's export sector shows some strength, the rapid increase in imports, especially energy, and the decline in key manufacturing sectors, are straining the trade balance. Addressing these imbalances, particularly through energy efficiency and boosting domestic production of capital and intermediate goods, will be crucial for improving the trade outlook.
The energy sector was a significant drag on the trade balance, deteriorating by 0.3 billion euros due to higher volumes of imported energy products. Consumer goods saw a slight decline of 0.1 billion euros but remained in surplus, indicating resilient domestic demand. However, capital goods and intermediate goods both faced setbacks, with their balances worsening by 0.3 billion euros and 0.1 billion euros, respectively.
The data suggest that while France's export sector shows some strength, the rapid increase in imports, especially energy, and the decline in key manufacturing sectors, are straining the trade balance. Addressing these imbalances, particularly through energy efficiency and boosting domestic production of capital and intermediate goods, will be crucial for improving the trade outlook.
Definition
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.
Description
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.
