Are we really “coming out of the inflationary crisis”, as declared by the Minister of the Economy, Bruno Le Maire, on Tuesday October 31, shortly after the publication of the latest indicators by INSEE? Over one year, the slowdown in inflation is, in fact, significant: while the price increase over twelve months was 6.2% in October 2022, it returned to 4% one year later, in October 2023. The slowdown is particularly spectacular in the energy sector, where inflation fell from 19.1% in October 2022 to 5.2% this fall. It is also felt, although less strongly, on food prices, which have fallen from 12% to 7.7%.
The only category where inflation increased slightly over this period is that of services, increasing from 3.1% to 3.2% due in particular to salary increases. For the governor of the Bank of France, François Villeroy de Galhau, these figures demonstrate “that we are resolutely moving forward on the path to inflation brought back towards 2% by 2025 »namely the objective set by the European Central Bank.
Unless the sword of Damocles which weighs today on the decline in inflation, namely the risk of a new surge in oil linked to the Israel-Hamas war, ends up falling on our economies. A risk which has not escaped Bruno Le Maire and which could threaten the end of the inflationary crisis. “Any extension of the conflict will have an impact on European and global growth. We all know, we are all perfectly aware of it”he assured.
And for good reason : “The decline in inflation is above all the result of the fall in energy prices after their phenomenal increase last year”, recalls Eric Dor, director of studies at the IESEG School of Management. In a report published Monday, October 30, the World Bank warns that if the conflict between Israel and Hamas “should gain intensity, the global economy would face a double energy shock for the first time in decades”, the first having been caused by the Russian invasion of Ukraine.
Food continues to rise
This dark scenario, however, remains hypothetical “as long as the conflict remains confined to Israel and Hamas », underlines Sylvain Bersinger, chief economist at the Astérès firm. Moreover, since the Hamas attack on October 7, the price of oil has fallen slightly. On the other hand, an irruption of Iran into the conflict would inevitably result in an upward spiral. The first oil crisis, in 1973, was triggered by the Yom Kippur War between Israel and its Arab neighbors.
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