According to surveys released on Friday, consumer sentiment in the two largest countries in the euro zone contrasted sharply in August, with German customers feeling the effects of increased energy prices while French consumers benefited from new government initiatives.
While households in Germany are paying more for energy after the German gas market operator set a levy in October to help utilities cover the cost of replacing Russian supplies, the French government has introduced a number of measures to help the population cope with rising inflation over the past year.
French official statistics agency INSEE reported that its consumer confidence index increased to 82 from 80 in July, exceeding the average prediction of 79 in an economist poll conducted by Reuters. For the first time in seven months, consumer sentiment increased.
Following the government’s introduction of electricity and gas price restrictions last year ahead of the presidential elections this April, additional measures, ranging from pension and civil worker pay increases to subsidised rebate on car fuel prices, have already been announced.
France’s inflation rate, which was 6.8% in July, is still the second-lowest in the euro zone, behind Malta.
According to economist Sylvain Bersinger of the French economic consultancy Asteres, ‘Household confidence should keep increasing in autumn thanks to higher salaries, which should allow for a minor gain in spending power.’
As Italy prepares for elections following the fall of Mario Draghi’s administration last month, consumer confidence increased there in August.
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