Inflation: Five Reactions You Must Follow to Maintain Your Standard of Living

It was a lie. During the presidential campaign, some candidates repeated whenever they liked that the purchasing power of the French had declined during Emmanuel Macron’s first five-year term. “Always more unemployment and misery,” said one. The other said, “Give the money back to the French.” “The scandal of low wages is weighing on us,” said a third.

However, statisticians have calculated the opposite. With the numbers not quite the same, of course, but they all go in the same direction. The French Observatory of Economic Conditions (OFCE) estimates the gains at 0.9% per year per household during this period. INSEE estimates the increase is 6% between 2017 and 2021. On the beneficiary side, the most modest 10% was among the best services according to OFCE. The IPP (Institute of Public Policy) believes that the most humble were less corrupt (+0.8% per year) than the richest (+1.1% per year). Finally, the employed were treated better (+2.6%) than the pensioners (+0.6%) while the unemployed saw their situation deteriorate (-1.1%), according to the Producer Price Index or the General Directorate of Treasury.

So it was a lie. But with the war in Ukraine, rising energy prices and returning inflation, this will become a reality for many French. Inflation, which is lower in France than in our neighbors (4.8% in April over a year versus 7.5% on average in the eurozone), is measured by daily shopping: the price of food has already increased by 3% and can reach +7% or even + 10% by the end of the year.

>> Find our complete portfolio of solutions to maintain your standard of living

How do you respond? The state has already pulled out a lot of budget cartridges with electricity price caps, gas price freezes, and pump aid (nearly 22 billion in spending). Some suggest going much further, risking burning the box. Reducing value-added tax on fuel? In addition to the fact that it will be a kind of pollution premium and that the decision is up to Brussels, the measure will reduce the state budget by more than 10 billion euros. price ban? What happens to a farmer who cannot pass on increases of all kinds that he suffers from? What are SMEs doing that turn red and that we are also calling for a wage increase? Breaking a thermometer when you have a fever never killed the disease. It will be up to the next government to find the right balance between budget imperatives and support for more modest families.

In our dossier on this topic, which 74% of French people put first, our ambition is more modest and more realistic: to explore new consumer practices that make it possible to protect one’s lifestyle while spending less. . The trends we detail in detail are gradually becoming part of our habits, whether it’s second-hand shopping, the shift from ownership to use, or more sober behaviour. Are these trade-offs still relevant? What savings can we expect? Capital provides the numbers to enlighten you.

There is no common law, however. The maturity of the market and the products involved must be considered. The first example is with smartphones. Is it still worth buying it new? It all depends on how you use it. The race for performance has become futile for many users. Likewise, 5G is not of much interest to individuals, and telecom operators are coldly aware of this. Only software hindrances that manufacturers put in place to force us to buy new can put a brake on. Europe, through new legislation, hopes to arm itself in the matter.

Conclusion: buying a refurbished model makes sense. The French understood this well: such products already account for more than 10% of the market and can reach a third within three years. It’s good for the wallet but also for the environment: according to Ademe (the French agency for the management of the environment and energy), 75% of the pollution emitted over the life of these devices comes from manufacturing.

On the contrary, in cars, technologies change at a high speed. The rise of electric propulsion, increasingly sophisticated electronics on board, and the gradual ban on diesel: these changes could lead customers into a kind of wait-and-see situation. Should we buy models that are at risk of obsolescence? Or rent it to stay “aware” of the latest technology? One thing’s for sure: Manufacturers rushed to this new model, LDD or LOA, which is now the main method of financing. The formula can make sense, even if it’s generally more expensive than buying on credit… as long as interest rates remain reasonable.

>> Solutions to maintain your standard of living. This is the cover of the latest issue of “Capital”. Access this edition in seconds from 4.65 euros.

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