You are here
French consumer confidence drops to lowest since November 2014
[PARIS] French consumer confidence fell in December to its lowest since November 2014, putting more pressure on the euro zone's second-biggest economy, which has been hit by anti-government protests.
The official statistics agency, INSEE, said on Wednesday its index of consumer confidence fell in December to 87 points from 91 the month before. Forecasts in a Reuters poll of 13 economists averaged 90 points for December.
INSEE said the extent to which French consumers felt able to make large purchases had fallen. So had their confidence over their personal financial situation.
The "yellow vests" movement - named after the fluorescent jackets all French motorists have to carry in their vehicles - started in mid-November as a protest against a fuel tax but has since grown into a broader backlash against the government.
The demonstrations have been marred by violence, which has led major shopping areas and tourist spots in Paris closing down during the weekends.
INSEE forecast last month that the French economy eked out 0.2 percent growth in the final quarter of 2018 as confidence dropped in the retail sector.
"There are two downward pressures exerting influence on the French consumers today as the INSEE read for December fell to 87 points. The first is the much broader economic slowing of momentum across Europe that is affecting not just France but also Germany, whose November exports fell 0.4 per cent month on month," said Lorne Baring, managing director at Geneva-based investment firm B Capital.
"With the two largest economies in mainland Europe losing pace, it is unsurprising that the French consumer is feeling less confident. The second negative influence is closer to home and is a direct result of the 'Yellow Vests' protests that swept through France's cities in November and December," Mr Baring said.
Jerome Schupp, a fund manager at Swiss investment firm Prime Partners, said he was avoiding stocks exposed to the domestic French economy, such as supermarkets Casino and Carrefour. Instead, he favours companies that make the bulk of their money outside France, such as oil major Total.
"The 'Yellow Vests' are clearly having an impact on the economy. It may be marginal for now, but the signs are there," Mr Schupp said.