French consumer confidence still in decline

30 June 2010

PARIS: Consumers in France remain in a highly pessimistic mood, with concerns over public spending cuts and future living standards mounting.

The monthly survey of popular perceptions from INSEE, the national statistics office, fell from –38 points in May to –39 points in June, and is down by a full nine points on the start of the year. 

"There's a realisation amongst the French public that some painful reforms are being implemented, notably pension reforms, and they're not stupid," said Pierre-Olivier Beffy, an economist at Exane BNP Paribas.

"They know there are going to be some more painful measures ahead."

The barometer for households' opinions of their current living standards dropped to –71 points in June from –68 points in May.

Elsewhere, the reading for future living standards slipped to –55 points from –53 points during this period.

Labour market conditions deteriorated further in May, with the number of jobseekers in France climbing by 22,600 to 2,699,600, an uptick of 7.1% year-on-year.

The country is the second largest economy in the Eurozone, and has already witnessed widespread protests relating to recently announced reforms to the pensions system.

The government, which is to freeze its expenditure for the next three years, is also likely to announce further fiscal austerity measures in the September budget.

Data sourced from Reuters; additional content by Warc staff