French consumer confidence rebounds after slump
Sudip Kar-Gupta

PARIS (Reuters) – French consumer confidence levels rebounded in January from a slump in the previous month, though they remained well below average as the euro zone’s second-biggest economy grapples with the impact of anti-government protests.

“I have to say, I am surprised by the pick-up in consumer confidence for January, given that every weekend you see pictures of shops being closed and damage being done,” said Clairinvest fund manager Ion-Marc Valahu.

 

The INSEE national statistics agency said consumer confidence in January rose to 91 points from 86 in December, which had marked the lowest level since October, 2014.

Fifteen economists polled by Reuters forecast 88 points for the January level.

INSEE said there had been a pick-up among consumers who felt it was a good time to buy products, as French department stores held their New Year sales.

“The decline around the end of last year was linked to the “yellow vest” protests, in our view. And the sharp rebound in January suggests a normalization process is under way,” wrote investment bank JP Morgan.

Nevertheless, INSEE said January’s consumer confidence level remained below the long-term average of 100 points.

Others were also wary of the near-term outlook for the French economy, given the damage caused by the “yellow vests” – named after the high-visibility jackets all French motorists carry in their cars.
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The “yellow vest” demonstrators on Saturday carried out their 11th consecutive weekend of protests, resulting in sporadic clashes with police across the country.

Moody’s credit rating agency on Tuesday said the protests posed risks to French economic outlook, with the government forecasting growth of 1.7 percent for 2019.

“I have to say, I am surprised by the pick-up in consumer confidence for January, given that every weekend you see pictures of shops being closed and damage being done,” said Clairinvest fund manager Ion-Marc Valahu.

Reporting by Sudip Kar-Gupta,; Editing by Andrew Heavens and Ed Osmond