Increasing job losses and rising inflation indicators have jolted the confidence of French consumers, according to national statistics institute INSEE.
Its index of consumer confidence plunged to minus eight in June, the fifth consecutive monthly fall in the Eurozone’s second largest economy [after Germany] and the lowest level since July 1999.
INSEE now predicts that the French economy will grow just 2.3% this year: “After four years of expansion, the French economy is being hit by adverse winds,” said its report. It also opined that the nation’s best hope of avoiding the worst of the slowdown rested on consumer spending remaining constant, as it seems to have done in the United States.
The fact that June’s dive in consumer confidence was less steep than in May was hailed by some economists as a silver lining: “The number is quite coherent with our view that with the slowdown in the dynamics of the job market, there is going to be a deterioration in confidence, but there won't be a collapse,” said an entrail-raker at Paris-based UBS Warburg.
News source: BBC Online Business News (UK)