A first in almost 25 years. In the first quarter, the French financial savings rate reached (excluding Covid) an unprecedented level of 10.5% and exceeded that of the Germans (9.9%), which had not arrived since the end of the year 2000, according to the bank of France.
At the same time, Hexagon offers the first place in the classification of European countries that show the highest financial savings rate. As a reminder, financial savings represent the sums imposed by households in financial products (brochures, actions, life insurance …) to which the savings used for reimbursement of real estate loans are excluded.
It is then reported that this amount is informed to available income (income after social transfers and taxes) to obtain the financial savings rate. That “has been multiplied by more than 2 since 2019” in France, underlines Philippe Crevel, economist and president of the Savings Circle. It is now 4.4 points higher than the average of the euro zone.
For its part, the French savings rate in the broad sense is not yet higher than that of the Germans, but quickly approaches: 19.4% against 18.6% in the first quarter. According to Insee, it even reached 18.9% in the second quarter. Desalo since 1979, out of the Covid years there.
Savings drawn by fear of the future and a population that ages
These figures only confirm the trend observed for several years: the French always leave aside more money and pending financial investments grow constantly accordingly (more than 6,400 billion euros). The explanation is multiple. First, there is “the context that anxiety provides with a succession of shocks: Covid, war in Ukraine, inflation, political crisis, international context …”, list Philippe Crevel. Without forgetting the situation of public finances that encourage French to take their precautions: “They anticipate taxes and possible financial difficulties,” says the economist.
If the savers wool bottom is increasingly bulky, it is also because the population is aging. However, the more we age, the more we tend to save. A recent Insee study has noted that retirees had contributed two thirds to increase the savings rate in the last two years.
Finally, the third explanation is due to the behavior of European savers and in particular French: “In France, we capitalize on the fruits of savings. Interests are greatly left in investments, we do not withdraw the profits to consume as is the case in the United States,” specifies Philippe Crevel.
However, with inflation, “interest rates have increased in recent years, capitalization of interest has fed the increase in the savings rate.”
Germany, a country of savers
Seeing the financial savings rate of the French who receive that of the Germans is not anecdotal to know that our neighbors have always had a mentality about savings than in other parts of Europe. In the first place, because the standard of living is higher, but also because the political class has historically encouraged people to build a wool socks. The weight of history also plays through “much more marked bankruptcy fears than with us,” says Philippe Crevel, remembering that Germany has been in bankruptcy three times during the twentieth century. Which encourages to protect against a possible financial or economic crisis.
The aging of the population within the first economic power of the continent is also more advanced than in France and pensions are less generous there, what friend promotes savings behavior. The French are also more owners than the Germans (56% against 44.5%), “which leaves more availability for financial savings throughout the RIN,” says Philippe Crevel. The financial heritage of the Germans remains much higher in this regard that of the French, more than 9,000 billion euros.
Bad news for growth, good news to reassure markets
Should we rejoice or worry about the continuous increase in the savings rate in France? No doubt both. “This can be worrying because testifying the distrust of the French. Above all, the increase in savings can be an obstacle to growth and contribute to the public deficit since more savings, it is lower consumption and, therefore, less fiscal income,” explains Philippe Crevel.
But the expert judges at the same time that these savings are essential because “it finances the investment of tomorrow and from the day after tomorrow.” Without forgetting that at a time when France’s indebtedness rates extend due to political instability and the situation of public finances, home savings are one of the elements that probably reassure financial markets: “If we did not have such a high savings rate, the French debt note of the qualification agencies would be more degraded,” the president of the savings circle concludes.
Source: BFM TV
