After an improbable peak of almost 27% at the heart of the first Covid-19 confinement, the savings rate has fallen significantly. Households are putting less aside, in particular to cope with inflation. But this fall will be short-lived, according to INSEE, which anticipates a sharp rebound in the savings rate. History of having an important mattress in case of a hard blow.
There is a desire to have precautionary savings, analyzes Julien Pouget, head of the economic situation department of INSEE, when presenting his quarterly economic report on Thursday. An analysis based on past and anticipated trends in the household savings rate, in other words the share of income that the French put aside each month.
This savings rate had been hovering around 14% or 15% since the 1990s… until the Covid-19 crisis. The first confinement caused a sharp rise to 26.8% in the 2nd quarter of 2020. A special case, but this savings rate remained very high, close to or even sometimes exceeding 20% at the end of 2020 and in 2021. a more classic rate in the 2nd quarter of 2022, 15.5%.
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But INSEE calculates a savings rate 16.7% in the 3rd quarter of 2022, and anticipates a recovery in this savings rate at the end of 2022 17.2% in the last quarter of 2022. Be careful, this does not mean that the French manage to invest more than 17% of their salary or other resources each month! Already, this is an average hiding very different situations… But, above all, this savings rate measures the share of income (1) which is not used for consumption expenditure.
The financial savings rate more accurately measures the money set aside for savings products and was only 7.7% in 2021, but this indicator is updated less regularly by INSEE. The overall savings rate thus makes no distinction between a repayment of a mortgage, an investment in life insurance and a financial cushion kept in one’s current account…
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How can this anticipated rebound in the savings rate be explained? We have reached historic lows for household confidencerecalls Julien Pouget, during a press conference. This is likely to weigh on consumption… and therefore have rather higher savings. He stresses in fact that earned income remains on the rise, sometimes in proportions higher than inflation. Despite appearances, despite the rise in prices, many households have a financial margin at the end of the month. This trend, which is accompanied by declining confidence, encourages savings. Just to prevent the disappointing tomorrows.
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(1) Gross disposable income.