France's trade deficit shrank to minus €3.91 billion in December 2024, improving by €2.43 billion from the previous month as exports outpaced imports. This positive shift was driven by a €1.9 billion rise in exports, reaching €52.255 billion, while imports shrank by €436 million to €56.160 billion.

A narrowing energy trade deficit played a key role in this improvement, reducing by €0.3 billion, following a €0.5 billion gain in November. Meanwhile, the manufactured goods trade balance strengthened, adding €0.4 billion to the overall improvement. The increase in exports of investment goods (€0.2 billion), along with growth in intermediate and consumer goods exports (€0.1 billion each), highlights France's growing competitiveness in global markets.

With rising exports and a stabilising energy deficit, France's trade performance is showing gradual signs of resilience. If these trends continue, the trade gap could narrow further in 2025, supported by stronger industrial output and improved external demand. The latest update leaves the French RPI at minus 14 and the RPI-P at minus 10. This means that economic activities in France are slightly behind the market expectations of the French economy.

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.