The purchasing power of households has regained color – The Tribune.fr

The purchasing power of the French had not progressed much since 2010. It rose 1.1% for the whole of 2014, despite a decline at the end of the year , according to INSEE, Thursday, March 26.

In detail, gross household disposable income increased by 0.5% in the third quarter. The received payrolls grew in the fourth quarter at the same rate as the previous quarter (+ 0.3%) but the taxes on income and wealth have accelerated (+ 3.8% after -0.1%) “under the effect of the new measures for 2014 on income tax (elimination of certain exemptions and lowering the ceiling of the family quotient)” says INSEE.

“In the third quarter, the impact of these measures was offset by the reduction in outstanding taxes for low-income households” , said INSEE to explain the different evolution of disposable income. Contributions have accelerated in the fourth quarter, the benefits remained strong and stable consumer prices (0% -0.1%). Thus, the purchasing power of households fell by 0.2% at year-end after rising 0.6% in the third quarter.

Other indicators published by INSEE for 2014:

• Household consumption increased by 0.6% over the year and grew moderately (0.2%) in the fourth quarter. The government increased by 1.9% over the year.

• side investment , the Institute confirms the down 1.6 % announced on February 13 but with a slight increase in non-financial companies (+ 0.7%) but a sharp decline in household investment (-5.9%), that is, essentially that for house purchases. Governments have reduced their investments by 3.3%.

• Economic growth was 0.4% in France in 2014, the same to that of the previous year. The gross domestic product (GDP) increased by 0.1% in the fourth quarter compared to the previous three months constant prices and seasonally adjusted and the number of working days. It was down 0.1% on each of the first two quarters before rebounding to 0.3% during the summer.

• exports increased by 2 9% last year after rising 2.4% in 2013. Their evolution over the year shows an acceleration at the end of the year (+ 2.5%) after more moderate increases on first three quarters. Imports increased by 3.9%. In total, the contribution of foreign trade to changes in the activity of the country was negative (-0.3%) after a very modest contribution of 0.1 percentage point of GDP in 2013. This means that the GDP growth in 2014 is put to the account of domestic demand (0.4) and inventory changes (0.3).

• The margin non-financial corporations (ratio of EBITDA to value added), one of the lowest in Europe, was almost stable (29.7% after 29 , 8%). “The favorable effect of the tax credit for Competitiveness and Employment (CICE) was offset by an increase in real wages higher than productivity gains” , said INSEE.