The French economy bends but does not break. In a note on the situation published this Friday, the National Institute of Statistics and Economic Studies (Insee) presented its estimates concerning the evolution of the main economic indicators of France for 2022. Figures which will be scrutinized by the executive before launching its next measures on purchasing power.
The title of this note, “War and Prices” (a nod to Tolstoy’s novel) says a lot about how the international context – the conflict in Ukraine, threats to energy supplies or even the “zero Covid” strategy of China — weighs on the country. But the French economy is currently showing resilience, even if prices will continue to rise. Given the international context, inflation should rise to 6.8% from the start of the school year. In 2022, it should stand at 5.5%.
The extended tariff shield
Such a level of price increase has not been seen since 1985. It nevertheless remains lower than in the other main economies of the euro zone. “And above all, without the price shield on gas and electricity prices put in place in November 2021 and the discount at the pump for fuel five months later, inflation would have been two points higher, explains Olivier Simon, Head of the Economic Summaries Division at INSEE. Or above 7%. »
Nevertheless, this surge in prices has an impact on the purchasing power of households. According to INSEE, it should drop by an average of 1% this year. But the fall could be even more brutal without “the purchasing power package” that the government is preparing and taken into account by INSEE in its calculations.
The amount of debt is worrying
What measures are we talking about? From the increase in the ceiling of the Macron bonus, the revaluation of the index point for civil servants, an inflation check. Social benefits (retirement pensions, social minima, family allowances and activity bonus) would also benefit from a boost. Without forgetting a new expected revaluation of the minimum wage and the booklet A, as well as the abolition of the fee. But nothing is played because without an absolute majority in the National Assembly, the executive will have to find a compromise with other political forces to relieve the French.
However, there is urgency. “Compared to the 2008 crisis, for example, inflation affects households even more directly in their budget,” warns economist Pascale Hébel, associate director at the consulting firm C-Ways. On food alone, for example, the price increase will represent 8.2%. That of energy, around 23%. With an even greater impact in rural areas or among the elderly. »
Support for French consumption is also essential to support growth which, according to INSEE, should increase by 2.3% over the year as a whole. Nothing to brag about compared to 2021 (+ 6.8%), but it should make it possible to generate 260,000 jobs and bring the unemployment rate down to 7% at the end of the year. “These optimistic forecasts on employment will push employees to renegotiate their salaries, further believes Pascale Hébel. Particularly in the most strained sectors, such as catering, IT or health. »
There remains a dark spot in this table: the astronomical amount of public debt. In the first quarter of 2022, it exceeded the 2.9 trillion euro mark for the first time. An ominous record.