Purchasing power variation in France 2007-2021
The decline of French purchasing power
Purchasing power, which is the quantity of goods and services that an income can buy, is linked with the inflation rate and the disposable income of households. In France, the inflation rate peaked in 2008 with 2.8 percent. After a decline from 2011 to 2015, the inflation rate has been increasing between 2015 and 2018 in France, reaching 1.8 percent in 2018. It amounted to 1.6 percent in 2021. This had a strong impact on the purchasing power of French households since the average annual household disposable income in France remained stable since 2005.
An important issue in the French public debate
The purchasing power has always been a sensitive topic within French public debate. In 2019, during the Great National Debate launched after the Yellow Vests movement, the purchasing power was mentioned as the priority issue that should be addressed during the debate. Most of the French public perceived the economic policy pursued by Emmanuel Macron and his Prime Minister, as having a negative impact on their purchasing power.