Unlike previous presidential elections, particularly in 2017, Emmanuel Macron’s re-election in April did not provide a boost to household confidence, which remains “weak”, INSEE said in its new forecast for the year. The year 2022. After the coronavirus crisis and the war in Ukraine, which continues to weigh on the French economy, the picture is indeed very bleak with growth ultimately set to grow by 2.3 percent this year, against the 4 percent forecast by the government in December’s finance law. .
Mainly due to inflation, which should continue to rise to 6.8% over the year in September and settle at an average of 5.5% over the year, up from 1.6% in 2021. the sector alone will greatly affect the purchasing power of the French, whose decline is estimated at 1% for the full year. “The previous notable decline in purchasing power starts from 2013” with a 1.2% decline, INSEE reminds. Which also explains very modest consumption growth, estimated at 2.3% in 2022, with households cutting back on spending and continuing to save
This forecast for purchasing power would have been worse without several billion euros in support measures to protect the portfolio of the French, whether registered or already announced. On the one hand, the price protection of the prices of energy carriers (gas and electricity), as well as the discount of 18 centimeters per liter of gasoline, undoubtedly made it possible to mitigate the inflation explosion. Within a year, the increase in prices will exceed 7% from 5.2% in May without government action.
Uncertain predictions
On the other hand, household income should increase by 4.1% during the year, compared to 4% in 2021, thanks in particular to support measures. In detail, although gross disposable income fell in the first quarter, it should recover in April-June, supported by rising wages. And for the second half, this progress will be “very dynamic”, estimates INSEE, which integrates the “purchasing power” package, which is scheduled to be presented to the Council of Ministers on July 6.
This package should include the renewal and tripling of Macron’s exceptional bonus, the revaluation of pensions and the social minimum of 4%, the unfreezing of the index point for civil servants… The state, household income and, more broadly, their purchasing power will be 1 point lower overall during the year, INSEE estimates.
However, these predictions remain extremely uncertain due to the lack of an absolute majority given to President Macron in the legislative elections and thus the great difficulty the government will have in passing its own laws. Starting with consideration of the 2022 amendment budget, which risks quickly devolving into a rat race in the Assembly…
Source: Le Figaro
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