French consumer confidence reached an all-time low in June as consumers are more pessimistic than ever about their future living standards, data show on Thursday morning.
Consumer confidence, which came in three points below analyst expectations of 81 and far below a long term average of 100, was the lowest since records began in 1972, data from statistics office Insee showed.
These data suggest that the euro zone’s second-largest economy (20%), hit by lagging trade competitiveness and a new recession, will not be supported by its traditional driver which is domestic consumption.
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In June, households’ opinion about the expected general economic situation in France slipped. The corresponding balance kept decreasing, as it had been doing since January (–2 points with respect to May), and reached a new historically lowest level. Furthermore, their opinion about past general economic situation decreased again (–2 points), thus reaching its lowest historical value of October 2008.
The consumer confidence indicator has been worsening in parallel with jobless numbers, which edged up to a new all-time high of 3,264,500, labour ministry data showed on Wednesday evening.
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The number of unemployed people in mainland France was stable in May with a negligible rise of 100 people, just nudging the total to a new all-time high of 3,264,500, labour ministry data showed.
According to the data, which goes back to 1996, the number of unemployed people in France has never been higher. The previous record set in 1997 was broken in March of this year.
The problem is that the sickly growth will leave France’s 2013 public deficit near 4% of economic output, overshooting an already revised target of 3.7% and further away from an EU goal of 3%, the state auditor said in a report on Thursday morning.
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France has little chance of meeting its revised budget targets this year and will need to make a big effort to cut public spending if it is to meet a new deadline of 2015 set by Brussels for bringing the deficit below 3 per cent of output, the country’s national auditor has warned.
In a report that underscored the scale of the fiscal task facing President François Hollande’s socialist government, the Cour des Comptes said: “France is hardly halfway towards budgetary consolidation begun in 2011 and the easing of the timetable, justified by economic slowdown, does not allow for any relaxation.”
It said the likelihood that the economy would shrink this year, hitting tax receipts, meant there was only “a small chance” of achieving the current budget deficit target of 3.7 per cent of gross domestic product.