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France Consumer Confidence Stalls

James Boston
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www.finances.com
France Consumer Confidence Stalls

Consumer sentiment in France has begun to wobble over the past few months and the latest reading today, although stable, looks to confirm that the upward trend in domestic optimism that was evident during the early part of this year has now come to an end. The September number has just been announced as a level of 86, this displays no change from the August reading and nor was one anticipated. Although the number may appear to be high compared to other countries it is worth bearing in mind that the all time low of the French Consumer Confidence Index is just below 80, this was reached in the middle of last year and it is a long way off the long term average of just over 100.

The French economy, which is by no means firing on all engines, had been showing some signs of health earlier in the year. The anticipated continuation of economic gains however have evaporated over the past two months as a deteriorating series of data show the economy to be far off course for a stable recovery. A finalization of the initial second quarter GDP readings for the country earlier in the week confirmed that zero growth had been recorded, this makes it two consecutive quarters of no economic progress for France. Official forecasts have now been revised down for full year growth, the 2014 rate has been revised to 0.4% from 0.5% while the 2015 projections now stand at just 1.0% from the previously anticipated 1.7%.

France is now back to the negotiating table with it’s EU partners to discuss further extending the 3% deficit target imposed on Eurozone member states. France had already received permission to run it’s deficit above target for two years from 2013 to 2015, current economic conditions however suggest that the target will not be met and a further extension to 2017 will now be requested.

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