French consumer confidence rises

28 January 2010

PARIS: Consumer confidence levels are improving in France, but shoppers in the country remain reticent when it comes to making major purchases.

The regular index of popular sentiment compiled by INSEE, the national statistics body, delivered a score of –29 points in January, compared with a revised figure of –30 points in December 2009.

However, growing fears regarding job losses meant the unemployment reading climbed by two points, to a total of 64 points, over the same period.

Respondents were also placing a greater emphasis on frugality, with the barometer measuring perceptions that "now is a good time to save" jumping from 12 points in December to 21 points in January.

Nicolas Bouzou, an economist at Asteres, argued "there's not too much to celebrate here, things are still quite weak from many points of view, and there won't be much impact in macroeconomic terms."

Joost Beaumont, an economist at Fortis Bank, added that recent tax cuts and the car scrappage scheme instituted by the French government may have produced some short-term benefits, but the picture remains highly mixed.

"The impact of these stimulus measures is going to fade and as that happens other aspects of slowing wage growth will come to the fore," said Beaumont.

"That may make them more reluctant to spend so the consumer spending outlook is weak."

Data sourced from Reuters; additional content by Warc staff