This surge in prices should weigh on the purchasing power of the French, whose decline is estimated at 1% in 2022.
Unlike previous presidential elections, the re-election of Emmanuel Macron at the Élysée Palace did not this time give a boost to household confidence, which remains “weakened“Notes INSEE, which published its forecasts for the year 2022 this Friday. Faced with the shock of the war in Ukraine after two years of the coronavirus crisis, which is already weighing on the tricolor economy, the picture is indeed gloomy, with growth estimated at only 2.3% this year. Admittedly, economists now rule out any risk of recession. But, “this rate is below what should have been expected in a recovery phase“says Julien Pouget, head of the business cycle department at INSEE.
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Persistent inflation, which is now spreading to sectors other than the energy sector, should reach 5.5% on average over the year with a soaring 6.8% in September over the year. This surge in prices should therefore weigh on the purchasing power of the French, whose decline is estimated at 1% in 2022 by INSEE. “The previous marked decline in purchasing power dates back to 2013 when it fell to 1.2%“, we specify to Insee. What explains a very modest increase in consumption to 2.3% after the strong rebound of 5.2% in 2021.
Public support
Nevertheless, the forecasts for this year in the field of purchasing power could have been even worse without the public support measures already recorded or announced by the executive and which amount to billions of euros. On the one hand, the tariff shield on the prices of electricity and gas as well as the rebate at the pump have indisputably made it possible to attenuate the explosion of inflation so far. Observed at 5.2% in May over one year, the rise in prices could otherwise have reached more than 7%, recalls INSEE.
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Above all, with regard to household income, which should rise sharply to 4.1% over the year after 4% in 2021. In detail, while gross disposable income fell sharply in the first quarter, it should pick up again between April and June, supported by wage increases. And, for the second half, this progression would then be “very dynamic“based on”on available public announcements regarding purchasing power support measures“, specifies the INSEE. The institute indeed integrates into its scenario the purchasing power package which should be presented to the Council of Ministers on July 6 and which includes, in particular, the renewal of the exceptional Macron bonus, the revaluation of 4% of pensions and social minima or even that of the index point for civil servants. Without this package, income and therefore purchasing power would be one point lower for the whole year, insists the Institute.
It remains that these forecasts remain all the more uncertain as the earthquake of the legislative elections only confers a relative majority on the Macron camp and then completely reshuffles the cards. And there is no doubt that the adoption of this purchasing power package risks quickly turning into a rat race in Parliament.
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