Savings and inflation: three strategies adopted by the French
The French have been deeply affected by the surge in inflation (and the subsequent acceleration of the inflation rate in recent months) that had the immediate effect of depressing their purchasing power and leading them to reappraise their expectations for future living standards. This new situation has encouraged French people to start saving again… to the effect that the number of people prepared to build up precautionary savings against a future deterioration in their economic situation has remained at the historically high level of 88%. A large proportion of the population (16%) claim, however, that they are unable to save any money at all! For a minority of French people, the frustration of this inability to save is compounded by their being obliged to give up the few cases of ‘consumption for pleasure’ they had managed to cling on to until recently.
The second strategy consists in building up as far as possible a nest egg capable of cushioning them against unforeseen events, with most people choosing sight deposit accounts and regulated savings products. The Livret A passbook savings account is still the most popular investment vehicle not because of the rate of interest it pays but because of its intrinsic qualities: ease of use, simplicity, and zero-risk savings. Real estate also continues to find favor in the eyes of the French as a good long-term investment; land and buildings remain the favorite assets of the French.