chart of the week
3%. This is the Livret A rate, and it will not change until January 31, 2025, announced the Minister of the Economy, Bruno Le Maire, on July 13. In other words, the government puts in the drawer for eighteen months the regulatory formula for calculating, half-yearly, the remuneration of this tax-free booklet.
Did this summer announcement contribute to discouraging nearly 56 million holders to invest their savings there, when this rate had been multiplied by three from February 2022 to February 2023, and when savers could expect, with the application of the formula, 4.1% annual interest? Not for now.
In July, 2.16 billion euros in net inflows (deposits minus withdrawals) were indeed recorded on Livret A accounts, according to figures published on 22 August by the Caisse des dépôts, against 1.34 billion in June. Enough to bring the outstanding amount of the product to just over 403 billion euros. This is around 547 billion euros, if we add the amounts placed in the Livret de développement durable et solidaire (LDDS), which works almost like the Livret A (the rate is the same, for example), and whose net inflows represented 970 million euros in July.
Another record year?
During the first seven months of 2023, the Livret A account collected 28 billion euros, already exceeding its total net inflow of 2022, which was nevertheless the best of the last ten years (27.23 billion euros)… This attractiveness is explained in particular by a “rate effect”, a 2% to 3% increase in remuneration having been announced in January 2023 and applied from the first day of the following month.
“Despite the decision not to raise the rate for eighteen months, households are not changing their behavior. They favor precautionary savings by drawing in particular on their current accounts, the amount of which has been falling sharply since September [2022]. They also carry out arbitrations to the detriment of taxed booklets which are poorly remunerated”analyzes Philippe Crevel, director of the Cercle de l’épargne, stressing that the Livret A as the LDDS are all the same “competed by term accounts which can offer attractive returns and which are not subject to payment limits”.
He believes that 2023 will be another record year, even if “collection should moderate during the fall with the traditional increase in spending”because “unlike the Americans but like the Germans, the French are in ant mode for fear of a deterioration in the economic situation or simply by the effect of demographic aging”.