Consumer confidence in France has dropped to its lowest level in 13 years, as widespread riots and demonstrations across the country have intensified concerns about the nation’s economic outlook. Official data released by Insee, France’s statistics office, showed a significant deterioration in households’ perceptions of their personal financial situations both past and future. This marks the worst consumer sentiment since Insee began tracking the measure in 1972.
The latest figures come amid ongoing unrest involving an estimated 550,000 protesters rallying against school underfunding and the rising cost of living. Cities including Paris, Lyon, and Marseille have witnessed some of the largest demonstrations in recent years, drawing parallels to the pension reform strikes of 2023 and the 2018 "yellow vest" protests. Police and demonstrators clashed again over the weekend, prompting authorities to deploy reinforced security measures to curb violence.
The protests have emerged in a context of heightened fiscal pressure on France’s government, which is seeking to implement spending cuts ahead of the presidential election scheduled for next year. Concerns about France’s escalating debt have been heightened by a recent surge in borrowing costs, which reached their highest point in 24 years last week before easing somewhat. The yield on 10-year French government bonds surpassed 5 percent for the first time since 2002, reflecting investor unease regarding the country’s fiscal trajectory.
Germany’s largest lender, Deutsche Bank, expressed alarm about the instability triggered by the unrest. Chief Executive Christian Sewing described the situation as "concerning," emphasizing the need for disciplined fiscal management, particularly ahead of the presidential vote. He noted that while the current circumstances did not amount to a debt crisis, the sharp rise in borrowing costs served as a warning signal about the importance of budgetary restraint.
Political responses to the turmoil have varied. Left-wing presidential candidate Jean-Luc Mélenchon has voiced support for the ongoing marches and advocates lowering the state pension age. Similarly, Marine Le Pen, leader of the National Rally and a leading contender to succeed President Emmanuel Macron, favors reducing the retirement age from 64 to 62.
In October, Insee reported a five-point decline in consumer confidence to a reading of 80. The data also indicated increasing fears over unemployment and a greater proportion of households perceiving price rises over the past year. Kevin Thozet, an investment committee member at asset manager Carmignac, described the decline in confidence as a negative indicator for economic growth, especially amidst rising debt costs.
Commercial entities have also felt the impact of the unrest. Carrefour, one of France’s largest supermarket chains, reported a sharp share price drop of over 14 percent earlier this month after lowering its full-year profit forecasts. The company faces approximately €10 million in repair costs linked to damages sustained during the protests, according to CEO Alexandre Bompard.
Overall, the combination of social unrest, fiscal concerns, and political uncertainty has created a challenging environment for France’s economy as the country prepares for a critical election cycle.