In August, France's trade balance continued its downward trajectory, with the deficit increasing by €1.3 billion to reach €7.37 billion. The increase was driven primarily by a larger drop in exports (€0.3 billion) compared to imports (€0.1 billion). This left exports at €49.6 billion and imports at €56.0 billion.

The energy sector balance improved by €0.4 billion, continuing its upward trend, but gains here were overshadowed by worsening balances in other sectors. Investment goods saw a decline of €0.3 billion, consumption goods €0.2 billion, and intermediate goods €0.1 billion. Nevertheless, consumer goods provided a silver lining, maintaining a surplus, a trend that has held strong since November 2023.

Still, the overall picture suggests growing challenges for France's trade, especially in areas like investment and intermediate goods. Today's latest report takes the French RPI to minus 4 and the RPI-P to 13, indicating that economic activity in general is slightly outperforming market forecasts.

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.