| Actual | Previous | Revised | |
| Balance | €-6.864B | €-5.778B | €-5.506B |
Highlights
The trade deficit widened to minus 6.864 billion euro in March, the biggest gap since May of last year, while the February shortfall was revised to minus 5.506 billion (-5.778 bn).
While both exports and imports grew in March, growth in latter outpaced that of the former. A total of 52.459 billion worth of goods exited the country, up from 51.952 in February, while imports grew to 59.323 billion in March, the highest in at least a year, from 57.458 billion.
The increased deficit is the result of higher energy imports, in particular from Kazakhstan, which were 1.6 billion higher. This is a direct result of the conflict in the Middle East which has been pushing energy prices higher since the beginning of March.
On the other side of the ledger, exports were higher also due to increased shipments of energy products which saw a 200 million increase each for refined petroleum products and electricity.
The trade data are now reflecting the impact from the Middle East conflict, with energy prices volatile as each day seems to bring conflicting messages on the hostilities. April and May data will continue to feel the impact.
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.