Dec. 24 - As French shoppers grab some last minute presents, Christmas Eve brought some slightly better news for the French economy. Consumer spending figures jump, while Q2 GDP is revised upwards. But as Joanna Partridge reports, challenges remain for France in 2014.
A moment to stop and admire the decorations - in the midst of the present-buying rush before Christmas. French shoppers headed to luxury department stores for some last-minute purchases, says Galeries Lafayette store manager Agnes Vigneron. SOUNDBITE: Agnes Vigneron, Manager of Galeries Lafayette Haussmann department store, saying (French): "We've seen a real Christmas rush, because Christmas remains for us, and for the French, a key moment of sharing when you want to make people happy and when shopping is still important." It's not just Christmas which has lured in French shoppers. Consumer spending rose by 1.4% in November, although it's not all good news. The figure was mostly driven higher by heating bills. With unemployment still at record levels just under 11%, consumers are still cautious about making large purchases. It's a mixed picture in other parts of the economy. Data from the national statistics institute showed the economy shrank by 0.1% in the third quarter. But it estimates it rebounded slightly in the final three months of the year. There was also some rare Christmas cheer for President Francois Hollande, as France's public debt eased in the third quarter. But tough challenges remain in 2014, says Mike Dolan, Markets Editor at Reuters. SOUNDBITE: Mike Dolan, Markets Editor, Reuters, saying (English): "Has he got the ability to have labour market reform and other structural reforms like that that Gerhard Schroeder in Germany did some ten years ago and Germany is bearing the fruit from that now. Does France have that ability to make that shift? And there is a debate there whether he has the willingness or the ability to push those reforms through." Hollande's economy credibility is on the line with voters and EU partners. He insists he can revive growth and public finances. But weak economic data may make it hard to push through much-needed structural reforms any time soon.