In July, French people saved 16 billion euros, i.e. over 2.5 times the average amount of deposits collected each month for the past three years, according to the Bank of France.

Introducing the recovery plan to prepare France for 2030 on Thursday, September 3rd, Prime Minister Jean Castex called for “a sense of responsibility by all players”, asking households to invest and consume “instead of saving”. According to the monthly note on the “Financial situation of households”, published by the Bank of France and of which the newspaper Le Parisien was given details, between March and July the French have set aside “on their current accounts, their savings accounts and interest-bearing accounts once their loans have been deducted” 85.6 billion euros, and even up to 107.5 billion euros in cash.

“This is a historic figure that reflects the crisis we are going through,” says Olivier Garnier, director-general of statistics, studies and international affairs at the Bank of France. In July, the French saved 16 billion euros, over 2.5 times the average amount of deposits collected each month since 2017. And this is likely to continue. “Given the health crisis, certain purchases, such as travel, remain restricted and until we have a vaccine, we can expect the French to continue saving as a precaution after a period of forced savings because of the lockdown,” explains Mr Garnier.

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“Households have suffered less from the shock of this crisis than companies, their income level has fallen but much less than the national wealth thanks to the emergency and short-time working measures put in place by the government,” the economist says. According to the Bank of France, the purchasing power of the French has fallen by 2% since the beginning of the crisis, far from the -11.5% drop in consumer spending in the second quarter (according to the national statistics institute INSEE).

It is, therefore, more a problem of confidence than of resources. “This explains why the government’s recovery plan does not include any additional measures to boost household incomes, as this would probably not result in more consumption,” says Olivier Garnier.