Economy: dwindling confidence and rebound in savings and deposits

Wednesday, 20 february 2019

See the monthly dashboard produced by Groupe BPCE’s Economic Research Department

With the yellow vests crisis in full sway, French household-confidence is eroding, as are consumers’ intentions to make large purchases, despite their purchasing power having increased. This framework is conducive to higher savings and deposits inflow in fourth-quarter 2018.Livret A accounts in good shape. Livret A accounts are showing a €6.2 billion surplus since January and continue to attract higher inflow than in the previous five years, in contrast to other banking products – particularly medium-term products – which were down sharply year-on-year. Total inflow into banking products amounted to €36.1 billion at end-November 2018, down 4% on a year earlier.

Inflow triple the 2017 figure. At end-November, life insurance was doing comfortably better than in the whole of 2017. Inflow reached €23 billion, similar to the total for full-year 2017. Although unit-linked inflow hit record levels in cumulative terms since January, it was nevertheless starting to slow on a year-on-year basis. However, there was confirmation of the recovery in inflow to with-profits products in 2018. Nevertheless, this dynamic performance in life insurance was not just related to higher premiums, but also to a sharp decrease in benefits to historically low levels as a percentage of the portfolio.