May 29, 2019
PARIS (Reuters) – French households ramped up savings in the first quarter as incomes rose following government measures to boost purchasing power, official data showed on Wednesday, confirming the economy maintained a steady growth rate in the period.
The INSEE statistics agency said the euro zone’s second-biggest economy grew 0.3% in the three months to end March, down from a revised 0.4% in the fourth quarter.
Households disposable income rose 0.9% after President Emmanuel Macron’s government presented a package of measures in December worth more than 10 billion euros ($11.2 billion) aimed at increasing the poorest workers and pensioners’ incomes.
Consumer spending, traditionally the motor of French growth, grew only 0.4% in the first quarter despite the efforts to boost incomes, up marginally from 0.3% in the previous quarter.
Instead of rushing to spend the extra cash, the GDP report suggests that households are instead setting it aside as the savings rate rose to 15.3% from 14.9% at the end of last year.
Macron rolled out the package in concessions to protestors who led a series of violent street demonstrations in Paris that saw some of the worst clashes with police and vandalism in decades.
Desperate to halt what has become the biggest challenge to his authority since his election two years ago, Macron followed up last month with a pledge to cut income tax by a further 5 billion euros.
(Reporting by Leigh Thomas,Editing by Dominique Vidalon)