French consumer spending jumps in April

25th May 2004, Comments 0 comments

PARIS, May 25 (AFP) - French household spending climbed sharply in April, official figures showed Tuesday, backing government optimism that the eurozone's number two economy could grow more rapidly this year than previously anticipated.

PARIS, May 25 (AFP) - French household spending climbed sharply in April, official figures showed Tuesday, backing government optimism that the eurozone's number two economy could grow more rapidly this year than previously anticipated.

Consumer spending rose 1.5 percent in April from the previous month, statistics office INSEE said, after a 1.3 percent drop in March, as French consumers flocked to clothing and shoe stores.

Spending climbed 3.8 percent in April from the same month a year earlier.

Analysts polled by AFX News, AFP's financial news service, had forecast a consensus increase of just 0.6 percent from March and 2.5 percent on an annual basis.

They said the report confirmed that despite continued high unemployment, spending remains the main driver of the French economy as consumers continue to dip into savings.

"Over the past several weeks, the INSEE data has not ceased to reveal positive surprises, especially with regards to consumer spending," said Natexis Banques Populaires chief economist Marc Touati.

"So much so that is now seems that full-year GDP (gross domestic product) growth of two percent is assured," Touati said.

This would surpass the government's own growth target of 1.7 percent for 2004, which French Prime Minister Jean-Pierre Raffarin said Monday would likely be exceeded.

Stronger growth would in turn provide a boost to France's public finances, battered in recent years by a stagnant economy and rampant unemployment.

A breakdown of the report showed that although spending on automobiles and other durable goods declined by 2.5 percent in April, expenditure on shoes and clothing surged 10.7 percent, after a 9.3 percent slide the previous month.

"Even if spending figures are very volatile from one month to another, April's give a good statistical overhang for private consumption in the second quarter," said Laure Maillard, eurozone economist at CDC IXIS in Paris.

© AFP

Subject: French news

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