French consumer confidence hits a 2013 low in October amid protests
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The proportion of consumers who believe that prices have risen sharply over the past 12 months has risen by 14 points in the last two months.
PHOTO: REUTERS
- French consumer confidence fell to 80 in October, its lowest since June 2013, as protests, political unrest and austerity fears hit sentiment, INSEE said.
- Households grew more worried about prices, jobs and finances. Views on saving weakened, and Bloomberg Economics warned weak sentiment could hurt spending and fourth-quarter growth.
- The government announced school and university reforms to calm unrest, but protests and strikes are set to continue. Inflation may rise to 3.6%, with growth near 0.1%.
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French consumer confidence fell by five points to 80 in October, its lowest level since June 2013, amid widespread protests in the country, official statistics agency INSEE said on Oct 27.
The country is being hit by a wave of protests, which began with small student demonstrations in suburban Paris in September to denounce school conditions and swiftly broadened into a wider demonstration against the government’s economic policies.
Economists surveyed by Reuters and Bloomberg had expected confidence to be around 85, the same as the revised September number and the latest figure is below any economist forecast.
The latest consumer confidence level is well below a long-term average of 100 between January 1987 and December 2025. The reading has been below 100 for five years amid bouts of inflation and political and budget instability and consumers are gloomy over a host of indicators.
The backdrop has worsened significantly in recent weeks with the minority government entering another showdown over austerity measures, a surge in borrowing costs as investors dump French bonds and an escalation of student protests.
The tensions boiled over on Oct 17 with violence breaking out around cost-of-living demonstrations, looting across the country and thousands of arrests.
INSEE’s latest consumer confidence measure does not reflect the full impact of the upheaval: while the cut-off was Oct 19, most of the responses are collected at the start of the three-week survey period.
“Weak sentiment is likely to weigh on spending as political uncertainty increases. This brings further downside risks to our fourth-quarter growth forecast,” said Jean Dalbard, economist at Bloomberg Economics.
In an attempt to calm the unrest that began with students blocking high schools, the French government announced on Oct 26 that it will overhaul the system for allocating university places, limit some class sizes and provide loans for building renovations.
But protests are set to continue on Saturdays as well as a day of demonstrations and strikes on Nov 5 that is backed by the country’s biggest trade unions.
The proportion of consumers who believe that prices have risen sharply over the past 12 months has risen by eight points, having already gained six points in September.
Data on Oct 30 is expected to show inflation accelerated further to 3.6% this month. A reading of gross domestic product, also due that day, will likely reveal that the economy expanded only 0.1% in the third quarter after stagnating in the previous three months and contracting at the start of 2026.
The INSEE survey found that households’ sentiment towards their past and future personal financial situations has dropped by nine and six points, respectively.
Fears over the trend in unemployment are on the rise again, up by five points following a fall in September.
The proportion of households considering this a good time for savings has fallen by six points, while views on their current ability to save remain stable. REUTERS, BLOOMBERG