The richest better protected from inflation by the rise in living standards in 2022, according to INSEE

Europe 1 with AFP // Photo credit: DENIS CHARLET / AFP 17:10 p.m., November 24, 2023

Inflation was largely offset by rising living standards in 2022, INSEE revealed in a study published this week, with disparities since it was more than compensated for the wealthiest Parisians. With unchanged consumption behavior, inflation represented an average loss of 1,320 euros per person in 2022, notes the National Institute of Statistics in its study "France, social portrait", ranging on average from 780 euros for the 10% most modest to 2,250 euros for the 10% most affluent.

Inflation has been "90% offset by rising living standards"

INSEE points out that "nearly 60% of the increase in spending comes from food, heating, electricity and fuel", and that inflation has "systematically" weighed more heavily on the poorest people. Thus, for the poorest 10%, the increase in heating and electricity expenditure represents -1.9% in relation to their standard of living, -1.0% for fuel and -1.6% for food, compared to -0.8%, -0.4% and -0.6% respectively for the wealthiest 10%.

However, inflation was "90% offset by the rise in living standards" last year, thanks to various measures, some of which are specifically anti-inflation, the abolition of the audiovisual licence fee, wage increases or income from assets (rent, interest, various capital gains, etc.). The poorest have benefited the most from social and fiscal measures, which have enabled the bottom 30% of people to compensate on average for more than 40% of the loss linked to inflation.

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Increases in wages and income from assets cushioned nearly 85% of the shock for the top 10%. The difference, INSEE points out, is also marked according to the place of residence: a little less than 85% of the additional costs linked to inflation were covered on average by the increase in the standard of living for the inhabitants of municipalities "outside the urban unit" (municipalities with at least 2,000 inhabitants), 90% for those in municipalities with more than 200,000 inhabitants and 100% for those in the Paris metropolitan area.

And these differences become more pronounced when the effects are combined. Thus, in municipalities outside urban units, only 75% of new expenditure was compensated for the poorest 20%, while in the Paris metropolitan area, the wealthiest 10% saw the increase more than compensated on average, around 120%.