are you one of the biggest losers?

Elderly French people living in rural areas: these are the households that INSEE unambiguously designates as the main losers from the great return of inflation in 2022. But they are obviously not the only ones to suffer from soaring prices (which is not ready to fall again).

Prices are increasing for everyone! But depending on your consumption habits, your activity, your standard of living or simply where you live, the return of inflation above 5%a first since 1985 hits you more or less hard in the wallet. Who has the right to complain more openly about soaring prices?

INSEE delivers a note on the economic situation supporting the exceptional nature of the current period. The fault is the health crisis and the war in Ukraine. To fully understand INSEE’s analysis, a look at the following graph is essential. In yellow, INSEE shows the role of energy (fuel, heating, etc.) in the current price hike. A leading role so far but… the forecasts for the next few months, on the right of the dotted lines, show that the landing is still a long way off. In pink, the services rents, water, health, communication, etc. take over, dragged into this spiral by the costs of transport, energy, etc.

Source: Insee, economic report, Friday June 24, 2022

Living in a rural area: the weight of the car and heating

+5.9% for the inhabitants of rural areas, against 4.9% inflation on average for the whole territory at the end of April, this detailed analysis not having been able to be based on the most recent figures (+5.2 % inflation in May and probably 5.9% overall in June).

Why this difference in inflation by place of residence? Energy costs. That is to say the blaze of diesel and gasoline, but also the costs related to the heating of a rural house. This observation is not entirely new, but it is currently increasing with what constitutes record inflation for France in the 21st century. At the end of the 2000s, when inflation exceeded 3% following the subprime financial crisis, rural people were already suffering more than households living in cities.

Within the same category, for example among residents in rural areas, there is necessarily an even greater heterogeneity of situations, nuance Julien Pouget, head of the economic situation department of INSEE. Faced with galloping inflation, INSEE promises even more detailed analyzes soon.

Over 75: the weight of housing

This second graph from Insee (below) is even steeper than the first. But it is ultimately very evocative: the zero level is headline inflation (4.9% at the end of April) and what is exceeded represents excess inflation. So we see one more point for rural areas. And the same surplus linked to energy (in green) for French people over 75 (left part of the graph). Explanation from INSEE: the weight of housing energy expenditure tends to increase with age. This excess energy expenditure is compensated for by these seniors by less consumption of manufactured goods, which reduces the overall inflation that affects them.

price CSP inflation
Contributions of the various items of expenditure to inflation. The black square represents overall inflation for each household category. Source: INSEE.

At the exact opposite, the under 30s experienced inflation at the end of April that was almost 1 point lower, that is to say less than 4%. This does not mean that they are the winners of this conjuncture, only that the cost of their life is increasing slightly more slowly. However, the rise in service prices announced by INSEE in the coming months could reshuffle the cards: it is already the consumer item that hurts their wallets the most.

Farmers: those who pay the high price

INSEE dissects the consumption of major socio-professional categories. Managers are certainly seeing the cost of services soar, but energy and fuel weigh less in their monthly budget than for other professions. Result: overall, executives suffer less inflation than the population as a whole (about 4.5% at the end of April against 4.9% for the French as a whole).

On the other hand, farmers are clearly the big losers in the current situation. Admittedly, they consume fewer services than executives and this item of expenditure therefore weighs less on their wallet… but they are extremely dependent on fluctuations in the cost of energy and food.

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Tariff shield + pump discount: according to INSEE, you have escaped inflation of more than 7%

Why is inflation, admittedly very high, rising less quickly in France than in its European neighbours? INSEE confirms the government’s argument, which insists on the role of the various emergency measures in the face of the health and energy crisis. Since October 2021, the price shield has regulated gas and electricity price increases. Then the discount at the pump of 15 centimes avoids an even sharper rise in fuel expenditure.

The combined effect of the various measures would have risen to 1.5 points in April and 2 points in May: in the absence of measures, inflation would thus have been more than 7% in May over one year (compared to 5.2 % observed), underlines Insee. It remains to be seen whether these measures really prevented an even more brutal and lasting rise in prices… or whether they only deferred the effects for a few months.

Retirement, rent, RSA, APL… The perverse effects of inflation-indexed revaluations

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