France 'more pessimistic' on economy as confidence dips
- 28 November 2013
- From the section Business
France is "more pessimistic" about the state of its economy than fellow eurozone countries, a European Commission survey has found.
French consumer confidence declined sharply in November, reflecting "worsening expectations about the future general economic situation, unemployment expectations and savings over the next 12 months", it said.
France's Economic Sentiment Indicator (ESI) score fell 0.9 points to 95.2.
But eurozone sentiment rose overall.
The ESI score for the 17 countries using the euro currency grew by 0.8 points to 98.5 in November, confirming the trend of steadily rising confidence, the Commission found.
But it warned: "While the upward trend observed since May has been preserved, the improvement in confidence has noticeably decelerated over the past two months."
France is causing the most concern.
Business activity in the region's second-largest economy shrank in November, as high labour costs and a lack of reforms hurt exports.
This came on top of news that its economy shrank in the third quarter of this year.
While France had taken steps to cut its deficit to below the recommended 3% threshold, its structural reform plans were only making "limited progress", the Commission said earlier this month.
Ratings agency Standard & Poor's recently cut France's credit rating from AA+ to AA, reflecting concerns about the country's creditworthiness and high unemployment level.
S&P said it expected government debt to hit 86% of gross domestic product in 2015 and unemployment to remain above 10% until 2016.
On Thursday afternoon, the latest unemployment figures from the French Labour Ministry showed that jobless claims fell back in October, offering some potential relief for President Francois Hollande.
Mr Hollande has recently appeared to step back from his commitment to reduce unemployment by the end of the year.
During a visit to Paris suburb on Thursday, he said: "It will be a battle, it's a battle that we have taken on, fought month by month."
The number of people registered as out of work fell by 20,500 in October, meaning 10.3% of people are out of work.
The total was 0.6% lower than the month before, but 6% up on the same period in 2012. French unemployment reached a peak of 11.2% in 1997.