The stoical French consumer

Before the economic crisis intensified last year, I remember having lunch with a French economist who joked that France would never fall into recession because Nicolas Sarkozy would not allow it: he would send his wife, Carla Bruni, shopping if the threat became real.

Of course, the country did fall into recession, but at least it achieved the distinction of being one of the first industrialised countries to return to growth. The latest news is that France’s economy is leading the rebound across continental Europe - thanks largely to its stoical consumers. Manufacturing purchasing managers’ indices today showed France outpacing the rest of the eurozone with output in the sector growing in October at the fastest rate for nine years, driven largely by domestic demand.

As for French retail sales, Royal Bank of Scotland calculates they have have held up better than in any other eurozone country since mid-2007, although the UK consumer has arguably shown even more resilience (helped by much lower mortgage interest rates).

The Sarkozy government’s stimulus programmes helped support demand, but it is not clear that they were dramatically more stimulative than in other European countries. Jacques Cailloux, European economist at RBS, says France’s rebound “is more a behavioural story – despite complaining about the economic situation, it seems as if the consumer is hitting the high street and spending.”

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