Consumer confidence rises in France

29 March 2012

PARIS: Consumer confidence is rising in France, a trend driven by the improving situation in the eurozone and optimism surrounding the country's forthcoming presidential election.

The regular index compiled by government body INSEE stood at 87 points in March, compared with the 82 points registered in February, a figure which has remained largely constant from December 2011.

"The INSEE survey should be taken with a pinch of salt," Marc Touati, economist at Assyam, warned. "We are far from euphoria; we are still at very low levels of confidence."

However, this improvement did constitute the best on record since Nicolas Sarkozy was elected in May 2007, although the most recent result was partly attributed to the ascent of Francois Hollande, his current rival for the presidency.

"Every five years people think the next government will do better," Dominique Barbet, an economist at BNP Paribas, said. "This time they're opening the champagne early."

Within the March 2012 total, sentiment concerning respondents' personal financial circumstances for the coming 12 months hit -18 points, versus the -25 points logged in the second month of this year.

Upon discussing the general economic outlook for the next 12 months, scores reached -39 points, measured against -51 points the previous month, but lagging the long term average of -23 points.

By contrast, when assessing expectations regarding inflation, ratings came in at -22 points, rising from a total of -14 points in the prior round of research.

"The media and political leaders had given the impression the world would end at the end of last year, but even if the situation hasn't changed, candidates in the presidential elections aren't talking in the same way," said Manuel Maleki, a senior economist at ING.

"During election periods there is always a feeling of stepping out of time, almost to an irrational level, which reassures people."

Elsewhere, while INSEE's contributors rated their current saving capacity at 16 points, figures declined to -12 points for their anticipated ability to engage in this activity going forward.

Major purchase intentions also stayed flat on -24 points, and a relatively modest ten points behind the long term average.

Data sourced from INSEE, Reuters, Bloomberg; additional content by Warc staff