August 27, 2021
French household confidence only deteriorated slightly in August despite an upsurge in COVID-19 cases and the extension of the health pass in public places, shows the monthly INSEE survey published on Friday. The indicator summarizing this confidence fell by one point to 99, while economists polled by Reuters expected an average of 100 points.
In June, this indicator of household confidence had reached 102 points, its highest level since the start of the pandemic, amid rising vaccination rates and easing restrictions linked to the coronavirus.
The drop in August is part of a tense health context under the effect of the spread of the Delta variant and the extension of the health pass to access restaurants, cafes, trains and certain shopping centers.
According to the INSEE survey, the proportion of households deeming it appropriate to make major purchases remained stable in August, but savings intentions increased for the first time in three months.
Concerns about the development of unemployment also remained unchanged from July.
The proportion of households that expect prices to rise over the next few months has increased slightly due to difficulties in supply chains.
This slight decline in household confidence is explained by the limited impact of the health pass on economic activity, even if its extension has provoked demonstrations.
Banque de France Governor François Villeroy de Galhau said on Thursday that the institution could raise its economic growth forecast for 2021, currently at 5.75%, when its estimates are revised next month. The government expects the economy to rebound 6% this year.
Leigh Thomas reporting; French version Anait Miridzhanian, edited by Marc Angrand
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