After years of decline in the use of cash, France is currently experiencing something of a renaissance. In the first half of 2023, the amount of cash withdrawn from ATMs increased by five percent compared to the same period last year. Inflation is probably to blame for this.
About 50 percent of payments in France are now made by card or mobile phone, but the number of cash withdrawals has risen slightly again, the newspaper ‘Les Échos’ reported on Thursday.
A tight budget is easier to keep track of
On the one hand, this is because expenses that people usually make with cash have become more expensive. On the other hand, when budgets are tight, people like to use cash to track their spending and not overdraw their accounts with card payments, a Banque de France spokesperson told the business newspaper. The UK Finance Association recently reported a similar trend in Britain.
More and more customers with cash envelopes
“We have been seeing an increase in the number of cash withdrawals in our branches for several months,” the head of a major banking network told “Les Échos”. “We have more and more customers purchasing cash envelopes to better control their spending given the current price increases.”
“Cash stuffing,” which is also promoted on social media, involves setting a budget for certain household areas and managing it in envelopes to make it easier to monitor and reduce expenses. There are also people who use cash to set it aside and keep it safe.
France is far ahead in terms of inflation and interest rates
Although inflation remains at a high level in France, the inflation rate is significantly lower than, for example, in Austria. In August, inflation of around 4.9 percent was recorded, while in this country it was still considerably higher at 7.4 percent.
When it comes to interest rates, the situation is currently looking better. According to an analysis by the ‘Momentum Institute’, savers in France get much more value for their money than in Austria thanks to the legally guaranteed minimum interest rates – currently between 3 and 6 percent.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
