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France's wealthiest citizens better protected by anti-inflation measures: report

A man rides on a city bicycle in Paris, Monday, March 30, 2020.
A man rides on a city bicycle in Paris, Monday, March 30, 2020. Copyright Francois Mori/AP
Copyright Francois Mori/AP
By Euronews with AFP
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Many of France's more modest earners only saw partial inflation relief, whereas the richest Parisians were overcompensated for losses caused by inflation, the study says.

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Inflation was largely offset by rising living standards in 2022, according to a study by France's statistical office, with the wealthiest Parisians seeing the most significant buffer.

Following normal consumption patterns, inflation represented an average loss of €1,320 per person in 2022, according to the National Institute of Statistics and Economic Studies (Insee), ranging from €780 for the 10% least impacted to €2,250 for the 10% most affected.

Insee highlights that "almost 60% of the increase in spending comes from food, heating, electricity and fuel" and that inflation has "systematically" weighed more heavily on the most modest earners.

The increase in heating and electricity costs had a greater impact on the standard of living for the lowest 10% of earners, with -1.9%, -1.0% for fuels, and -1.6% for food. In comparison, the highest 10% experienced -0.8%, -0.4%, and -0.6% respectively.

Inflation was however "90% offset by the rise in living standards" last year, according to Insee, thanks to anti-inflation measures that the government took, such as the abolition of the audiovisual licence fee, and increases in income from assets such as rent, interest and various capital gains.

The lowest earners benefitted the most from social and tax measures, which enabled the 30% least well-off to offset on average more than 40% of losses incurred due to inflation.

For the wealthiest 10%, wage and asset income increases absorbed almost 85% of the shock.

Insee notes that the gap is also affected by where people live: on average, just under 85% of the additional costs linked to inflation were covered by the rise in living standards for residents outside of urban areas (at least 2,000 inhabitants), 90% for those in areas with more than 200,000 inhabitants, and 100% for those in the Paris urban area.

These disparities become more pronounced when the effects are considered together. For instance, in non-urban areas, the lowest 20% had only 75% of new expenses compensated, while in the Paris area, the wealthiest 10% experienced an average overcompensation of around 120%.

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