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Soaring prices: what the future could contain "purchasing power law" of the government

Faced with galloping inflation in France, Emmanuel Macron, freshly re-elected to the Elysée, promised an “exceptional law for purchasing power”. The post-Covid economic recovery and the war in Ukraine have caused prices to soar in recent months, in particular those of raw materials and energy, having a more or less heavy impact on the purchasing power of households and businesses. The government has already put in place some measures to reduce the bills of the French, such as the tariff shield, the fuel discount or the inflation bonus. But, according to forecasts, the surge in prices is likely to continue. So the government is working on “a purchasing power package” to continue to help taxpayers, said the President of the National Assembly, Richard Ferrand, on France 3 Sunday May 8.

Anti-inflation measures should indeed be included in the amending finance bill (PLFR), traditionally voted on during the summer, explains BFM TV. This year, it will be presented to the National Assembly after the legislative elections in early June. This future “purchasing power law” will include several measures announced by candidate Emmanuel Macron. The tariff shield which governs the prices of gas and electricity should be renewed. The pump discount of 18 cents could also be extended beyond July 31, but more targeted at “big rollers” as explained by the Minister of the Economy, Bruno Le Maire, in March. Another promise of the presidential candidate who could be part of the PLFR: the indexation of pensions to inflation observed “from this summer”, while they are normally revalued each year in January, recalls The Sunday newspaper (The JDD).

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We learn in several media that social benefits could also be set on the evolution of consumer prices: the RSA, the activity bonus, the allowance for disabled adults or family allowances. Among the other provisions that could be included in the PLFR, there is also the food voucher, which was adopted in July 2021. It should finally come into force in the form of aid of 50 to 60 euros per month. It will be paid to beneficiaries of social minima or to the most modest households and will be targeted on certain types of food purchases. The frequency of its payment is not yet defined.

All these measures will weigh heavily on public accounts, while France’s debt will reach 113.5% at the end of 2022, reports Le JDD. According to information from echoes, Monday, May 9, the first salvo of anti-inflation measures cost at least 26 billion euros. The economic newspaper estimates that the discount on fuel for “big wheels” could cost 3 billion euros, the same for the revaluation of pensions in relation to inflation. Emmanuel Macron intends to offset these expenses by creating jobs and raising the retirement age.

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