The seasonally adjusted trade balance was E3.42 billion in the red in December following a minimally smaller revised E4.37 billion in November.
The decline, which left the deficit at its lowest level since June, reflected a 4.0 percent monthly bounce in exports to a new record high of E40.42 billion. However, this was essentially attributable to a doubling in the usual rate of aircraft deliveries and so provides a misleadingly bullish impression of the underlying trend. Imports were up 1.4 percent, largely due to stronger purchases of aerospace and refined petroleum products, agricultural products and metals.
Despite December's improvement, the fourth quarter shortfall still stands at E13.02 billion, up from E12.54 billion in the July-September period and the worst merchandise trade performance since the third quarter of 2014. The provisional fourth quarter national accounts showed total net exports adding just 0.1 percentage points to quarterly GDP growth. Over 2016 as a whole, the impact was minus 0.9 percentage points, up from a 0.3 percentage point hit in 2015. Worries about the capacity of French exporters to handle a stronger euro will not go away any time soon.