France’s purchasing power is falling sharply

The decline in purchasing power in France has become one of the
most noticeable economic concerns of recent years. In 2025,
household purchasing power fell by 0.7%, and a similar decline is
expected this year. Such a situation has occurred only twice since
1960 — in 1983–1984 and again between 2010 and 2013.

According to calculations by the French Institute of Economics,
the decline in purchasing power since 2024 has resulted in an
average real loss of around €1,200 for a family of four. For a
single person, the loss is estimated at approximately €600.

Experts point to inflation and slower growth in real wages as
the main factors behind the decline. Since 2019, consumer prices
have increased by 21.3%, while wages have risen by only 18.7%. At
the same time, the unemployment rate increased from 7.2% at the
beginning of 2023 to 8.3%, putting additional pressure on household
budgets.

The impact has been particularly noticeable among middle-income
families. Between 2019 and 2024, wages declined in real terms in
222 of the 343 professions surveyed by France’s National Institute
of Statistics and Economic Studies (INSEE).

As everyday expenses have increased, French consumers have also
started changing their shopping habits. More people are looking for
discounts, comparing prices and choosing cheaper products,
including supermarket brands. Some households are also cutting back
on non-essential purchases, such as eating out, entertainment and
travel.

Interestingly, purchasing power is not only about how much money
people earn — it is also about what that money can actually buy.
Even when salaries increase, households can feel poorer if prices
for food, housing, energy and other essential goods rise faster
than their incomes.

Experts warn that if purchasing power continues to decline in
2027, consumer behavior could change even further, potentially
leading to more cautious spending and greater demand for low-cost
products and promotions.

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