Consumer Demand Continues to be Muted – Christmas Sales Expected to Grow

In the euro zone, private households were markedly more cautions in their propensity to consume during the downturn phase of 2001-2003 than they were during the slump of 1992-1994. Accordingly, consumption gave much less of a boost to economic activity, a development which can be ascribed to the low confidence level on the part of consumers faced with high unemployment, a gap between their perception of inflation and actual figures, restrictions in public finances and pension systems, and the associated reforms and how they are seen by private households.