Seasonally adjusted, the merchandise trade balance was E4.66 billon in the red in June after a smaller revised E4.33 billion in May.
The modest headline deterioration reflected a 2.8 percent monthly fall in exports that more than offset a 2.0 percent decline in imports. The former was hit by weakness in aerospace, autos and pharmaceuticals while the latter suffered from falls in energy, pharmaceuticals, aeronautical, space, food and intermediate goods.
Despite the worsening in June, a second quarter deficit of E14.58 billion still compares very favourably with the first quarter's E19.77 billion when net exports subtracted 0.6 percentage points off quarterly real GDP growth. Indeed, the provisional national accounts already released showed net external trade boosting growth by fully 0.8 percentage points last quarter. Nonetheless, the trade deficit remains sizeable and, at E34.35 billion over the first half of the year, was nearly 50 percent larger than during the same period of 2016. Even allowing for swings in energy prices, the red ink raises serious question marks over French competitiveness and local industry will certainly not want to see the current rally in the euro extended much further.