The health crisis caused a price spike on many everyday consumer products. French households are facing a difficult economic situation, in particular due to the rising cost of living. More and more of them have to give up certain products from their shopping basket, which are becoming more and more expensive. The details of this inflation in this article.
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Inflation in France for 2023 and 2024
The French will still have to be patient. Until the end of 2023, inflation will be high in France, between 5.5% and 6.5%. According to the OFCE’s economic forecasts, inflation should then fall back to around 3% at the end of 2024. Due to the rise in prices, household purchasing power is expected to decline by 1.2% between 2022 and 2024.
During a press conference, Mathieu Plane, deputy director of the OFCE, declared that:
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“The increase in nominal wages did not compensate for the rise in prices. This reduced purchasing power. »
This will happen despite the tax measures deployed by the government. Such as the reduction of the housing tax or the abolition of the audiovisual license fee.
The observatory notes that companies continue to invest and hire. While households reduce their spending and investments to cope with the drop in purchasing power, thus creating a decoupling.
According to the OFCE, the growth of the French economy will be limited to 0.8%, slightly below the government forecast of 1%. In 2024, it will increase to 1.2%. Although domestic demand is supporting growth, foreign trade is dragging it down. With a record deficit in 2022, more than half of which is attributable to high energy prices.
The researchers point out that this leads to a « current funding need of the nation » historically high. Comparable to that of the first confinement of 2020 or that of 1982, before the turn of rigor.
The population is deprived
The price increase has a first impact: the renunciations, already observed last year, continue. Household purchases in volume fell by 1.5% on average in the first quarter of 2023 and by 2.5% in medium-sized cities (20,000 to 200,000 inhabitants), which are more affected by the phenomenon.
It is mainly families (3.6%) and people aged 35 to 49 (3.6%) who make sacrifices. But even the upper middle classes are reducing now their purchases (4.5%).
The sacrificed goods
The French population, being strangled financially, must make choices. They reduce their purchases of hygiene and beauty products (-10%, in number of units per household) as well as cleaning products (-6%). Consumers also reduce their purchases of fresh produce (-5%), whether for butchers, fishmongers or fruits and vegetables.
However, they continue to buy as many dairy products and a little less food in savory groceries (-2%). They still allow themselves some deviations from the sweet grocery side (+1 %).
New reflexes
According to NielsenIQ, reported by BFMTV, the shopping habits of the French have evolved with inflation. They buy less (-7.5%), but visit stores more frequently (+6.5%) to adapt to daily needs.
Families of more than four people increased their frequency of purchases by 7.6%while their average basket decreased by 10.3% with each checkout.
Inflation: what solutions?
Trade Minister Olivia Grégoire said that the “anti-inflation quarter” had slowed price increases. Especially on products affected by promotions in supermarkets.
However, Elisabeth Borne called on agro-industrialists to make an effort to lower prices when negotiating with supermarkets. Because the peak of inflation is predicted for the beginning of the summer.
According to Olivier Dauvers, retail specialist quoted by France Info, prices will stop rising by the summer. But they will remain at a high level. The costs will only go down slowlywith an acceleration in September.
Provided that all industrialists cooperate by passing on price drops, particularly of cereals, to consumer benefit.