How effective has the price shield been? Beyond political speeches, a study signed by the Institute of Public Policy comes to answer this question. Conclusion: the shield was the least bad solution to inflation, but it showed its limits.
Has the tariff shield adopted by the State to protect the French as much as possible really been useful in the face of inflation? Yes, says a study by the Institute of Public Policy. Without this state protection, inflation would have been 7.5% in 2022 against the 6.4% estimated at the end of the year. “It had the effect of reducing the inflationary spiral, reducing inflation from the start and therefore the chain effects in the economy which could have led to higher inflation”, explains Antoine Bozio, director of the Institute of public policies.
An expensive and inaccurate shield
However, the institute notes two limits: its cost, 110 billion euros and its lack of precision. Supporting figures, the institute shows that inflation weighed more heavily on the poorest 20% of French people than on the wealthiest 20%.
“If we could find an instrument which has the same properties as the tariff shield but which would make it possible to better discriminate between those who are capable of adapting and those who are not capable, we would have a more effective instrument at a lower cost for the public finance”, commented Antoine Bozio. The effect of the shield will be even clearer in 2023 according to the IPP. He should limit inflation to 4.6% against 6.4% in his absence.