The health crisis that resulted in the halt of productive activity and the lockdown which reduced household spending, consequently, significantly increased savings and, as a result, the liquidity of families.
The goal of the Ministry of Economy is to put this surplus back into circulation as soon as the health situation normalizes, both in investment and consumption. A basic element for this to occur is that citizens regain confidence in the near future.
The Bank of France reports that the accumulation of household liquidity has reached 116.8 billion euros since March, with a continuous increase
Thus, in September 2020, the accumulation of household liquidity, meaning their available savings excluding bank credits, increased by 5.4 billion euros, which is a rise nearing the pre-Covid average. Between January 2017 and February 2020, the average accumulation of household liquidity was 5.9 billion euros.
If the trend is upward, it is less strong than the one recorded between March and July 2020, during which the accumulation fluctuated between 22.2 billion euros in March and 17.9 billion euros in July, with a peak of 26.6 billion euros of additional liquidity in April 2020. August 2020 marks a significant drop in household saving intent as it marks the month of the summer break during which households tend to spend more (+3.6 billion euros in savings in August). Thus, in seven months (March-September 2020), the accumulation of household liquidity has reached 116.8 billion euros.
The accumulation of household bank credit has reached 33.5 billion euros since March
Bank credit also saw specific fluctuations due to the global pandemic. The Bank of France highlights the sharp decline in bank credits during the first two months of the lockdown in March and April, with a total decline of 4.5 billion euros in bank credit during these two months. The end of the lockdown marks a return of household debt. In June 2020, bank credit increased by 10.1 billion euros.
In September 2020, bank credit increased by 8.9 billion euros
This increase exceeds the average pace of bank credit during the pre-Covid period from January 2017 to February 2020. Over the seven-month period studied by the Bank of France between March and September 2020, the accumulation of household bank credit reached 33.5 billion euros.
Thus, the accumulation of household bank savings, which corresponds to the accumulation of liquidity minus that of bank credits, stands at 83.3 billion euros.
