Despite inflation – and in the anxiety-provoking context of the war in Ukraine – French households continued to feed their woolen stockings in the first quarter, show statistics from the Banque de France published this week. 39.9 billion euros were thus placed in their financial supports, bank accounts and savings accounts between the beginning of January and the end of March, bringing total national savings to 5,870 billion euros.
This flow is up by 8.9 billion euros compared to the previous quarter. It is mainly due to an increase in the amounts placed on sight deposits (current accounts) and on regulated savings accounts (8.3 billion after -0.2 billion in the 4th quarter of 2022), thanks to the increase the return on the Livret A booklet, which fell to 1% on February 1. Conversely, the French fed less into the funds in euros for their life insurance and retirement savings contracts and also bought fewer shares.
A savings rate still higher than in 2019
In value, however, their savings declined, due to the impact of falling stock market prices on equities and life insurance products. Thus, if more money was invested, the value of national savings fell by 155 billion compared to the previous quarter.
As a result, the average household savings rate fell from 18.3% to 17.1%. This had risen to 19.6% in 2021, the successive confinements and the closure of certain businesses with the arrival of the Covid pandemic having led to a “constrained savings” effect on households.
At just over 17%, however, this savings rate, which remains the 2nd highest in Europe behind Germany (at nearly 21%), still remains above the levels observed before the pandemic.
Expected fall in flows placed in the 2nd quarter
For the 2nd quarter of 2022, the first data from the Banque de France show a slight slowdown in interest-bearing bank deposits (10.7 billion after 12.8 billion), regulated savings (3.1 billion euros against 8.3 billion in Q1), and a further negative net flow for funds in euros for life insurance contracts (-3.6 billion). Unit-linked life insurance investment flows gained some ground (11.7 billion after 10.6 billion T1).