Morale among French consumers is at an all-time low and they are more pessimistic than ever about their future living standards, data showed today, adding further to the gloom as France battles with unemployment.
The figures showed the euro zone’s second-largest economy, hit by lagging trade competitiveness and a caught in a shallow recession, will not be able to count on its traditional driver - consumer spending - to rebound.
The sickly growth will leave France’s 2013 public deficit near 4 per cent of economic output, overshooting an already revised target of 3.7 per cent and further away from an EU goal of 3 per cent, the state auditor said in a report today.
Consumer confidence, which came in three points below analyst expectations of 81 and far below a long term average of 100, was the lowest since records began in 1972, data from statistics office Insee showed.
Worryingly, households’ view on how their standard of living would evolve also came in at the lowest in over four decades, while more people consider this is the right time to save and fewer plan important purchases.
The consumer confidence indicator has been worsening in parallel with jobless numbers, which edged up to a new all-time high of 3,264,500 in mainland France, labour ministry data showed yesterday.
Insee forecast last week that the economy would contract by 0.1 per cent this year as subdued consumer demand weighs.
It said growth would be too weak for the economy to start creating new jobs and forecast that the unemployment rate would hit 11.1 per cent by year-end, just shy of a 1997 record of 11.2 per cent.
Reuters
