Household savings are eroding but remain well above their pre-crisis level


The French continue to put more money aside than in normal times. This is shown by the figures published this Thursday by the Banque de France. If, in the first quarter, the flow of investments was down slightly cumulatively over four rolling quarters (162.5 billion after 165.8 billion), its level remains higher than that before the pandemic (108.8 billion in 2019 ). As a reminder, it had exceeded 200 billion in 2020.

Similarly, the household savings rate fell in the first quarter (17.1% against 18.3% in the previous quarter), but remains far from the pre-crisis 14%, after reaching 21% in 2020. “Household consumption has picked up compared to the Covid period, but since household income has been well protected throughout the pandemic, savings capacity remains significant,” explains François Mouriaux.

No war effect in Ukraine

According to the director of monetary and financial statistics of the Banque de France, it is difficult to estimate the effects of inflation linked to the war in Ukraine. “There is not a very strong reaction, probably because households trust central banks to control inflation,” he analyses. Finally, “changes in household behavior are always relatively gradual,” he observes.

In the breakdown of the flow of financial investments, savings invested in interest rate products decreased over one year (111 billion cumulated over four quarters against 114.9 in the previous quarter), while investments in equity products continued to increase ( 58.2 after 54.3 billion euros), driven by investments in unlisted shares and other equity investments and by unit-linked life insurance subscriptions.

Outstandings, the value of holdings fell in the first quarter due to the impact of the fall in stock market prices on equities and life insurance. Household savings also fell slightly over the first three months of the year (67.2 billion after 68.5 billion), but remained at a higher level than before the pandemic. Conversely, their flow of indebtedness with financial institutions is increasing (26.8 after 18.9 billion).

Back to normal in 2024

For the second quarter alone, the first figures show a slight erosion of interest-bearing bank deposits (10.7 billion after 12.8 billion), mainly regulated savings (3.1 billion euros against 8.3 billion), a net flow again negative for life insurance contracts in euros (-3.6 billion) and a slight increase in the flow of unit-linked life insurance investments (11.7 billion after 10.6 billion) .

According to François Mouriaux, the savings rate “has come a long way to return to its long-term average, but the projection model published on June 21 by the Banque de France predicts that it will be in 2024 that we will find a normal average of 14 to 15%”.

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