French consumer morale unexpectedly strong in March despite COVID-19 curbs

FILE PHOTO: A woman, wearing a protective face mask, walks with her shopping trolley in a street in Cambrai before new lockdowns imposed during a month-long on Paris and parts of the north after a faltering vaccine rollout and spread of highly contagious coronavirus disease (COVID-19) variants in France, March 19, 2021. REUTERS/Pascal Rossignol

PARIS (Reuters) – French consumer confidence rose unexpectedly in March despite new coronavirus restrictions on large parts of the country and the prospect of more curbs on the way, official data showed on Tuesday.

The INSEE stats agency said its monthly consumer sentiment index rose to its highest level since December to reach 94 points from 91 in February.

Economists polled by Reuters had on average expected the indicator to remain unchanged.

The improvement came even though the government tightened restrictions on Paris and much of northern France during the month in the face of steadily rising COVID-19 case numbers.

Households were their least pessimistic about prospects for the general economic situation since March 2020, when the pandemic was beginning to spread. Concerns about unemployment were at their lowest since April last year.

Despite their improving confidence, households indicated they were more inclined to save extra cash than spend it. The measure of savings intentions was at its highest since the survey began in 1972.

Unable to spend at stores, restaurants and venues closed by coronavirus restrictions, households have built up huge extra savings during the crisis which the central bank expects to reach 165 billion euros ($194 billion) by year end, or nearly 8% of gross domestic product.

($1 = 0.8508 euros)

Reporting by Leigh Thomas; Editing by Andrew Heavens