French consumers feel bleaker amid political turmoil

livemint.com:

French consumers are feeling less confident about their prospects amid surprise elections, a fresh headwind for the country’s fragile economic recovery. A measure of confidence compiled by France’s statistics agency fell to 89 in June from 90 in May, according to a survey released Wednesday, in which a reading of 100 represents the long-term average for consumer sentiment. Consumers reported worsening feelings for the quality of living in France in the months ahead, as well as for their own future savings’ prospects and willingness to make major purchases.

As in other parts of Europe, household confidence was shattered by Russia’s invasion of Ukraine early in 2022. But sentiment had been improving this year as price rises slowed and incomes began to increase again in real terms. More confident households tend to spend more freely, and a pickup in consumer spending supported growth in each of the last three quarters.

The fresh slide in confidence comes after President Emmanuel Macron earlier this month plunged France into political turmoil by dissolving the National Assembly and calling fresh elections for the legislature, in response to a heavy defeat for his party in elections for the European parliament. The result of the new vote—with a first round due this Sunday and the second a week later—is far from certain. But Macron’s party looks likely to be toppled from its place as the largest grouping in the assembly, raising the prospect of a “co-habitation" in which the president is forced to appoint a prime minister from a rival party.