The rise in energy prices is making French morale gloomy.

“Households feel this crisis as an extremely serious crisis and it can be felt in their way of consuming”, notes Mathieu Plane, deputy director of the analysis and forecasting department of the French Observatory of Economic Conditions (OFCE).

In December, the index which summarizes the opinion of households on their economic situation and that of the country fell by one point to 82 and remains well below its long-term average, which is 100, according to the Insee.

“On the outlook for the standard of living in France, we are almost at a historic low since the 1970s”, underlines Mathieu Plane. 

In particular, the propensity to save remains well above its long-term average, a sign of household fears for the future.

Since the summer, morale has not deteriorated

Household morale had reached a historic low in July 2022. Since then, it had risen a little and is no longer deteriorating, helped by a drop in the fear of unemployment.

“It is a little early to imagine that this (household morale) could start to rise again sharply, we are in a stabilization phase”, specifies Philippe Waechter, economist at Ostrum Asset Management

Households are still worried about future inflation, even if the rise in consumer prices fell slightly between November and December, falling from 6.2% to 5.9% over one year, according to an initial estimate of the 'Insee.

"In a world with relative geopolitical stability and with no new energy shock or health crisis hitting the production chains, we should see a decline in inflation over the whole year, especially from the second semester", analyzes the OFCE economist.


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