Forecasts for household financial investments in 2019-2023

It is expected that net inflows of financial investments by French households will be significantly driven in 2019 by the temporary boost in household purchasing power and by the continuing high distribution of mortgage loans.

From 2020 onwards, however, pressure on private individuals’ income is expected gradually to intensify owing to the probable return of the French economy to its original trend rate. With regard to arbitrage, the context of historically low interest rates (which no longer reflect a legitimate preference for the present) along with a relatively flat yield curve and inflation of less than 2% per year is likely to continue to frustrate the 3-way rational choice between liquidity, profitability and risk. Investors are still expected to prefer secure, accessible savings to those that offer higher returns yet involve greater risks such as equities, even if investors tend to be a little better than before at judging returns net of tax and inflation.