The increase in consumer prices in France reached 4.9% on annual average over the whole of 2023, marking a slight slowdown compared to the previous year (5.2%), announced the National Institute of Statistics (Insee), Friday January 12.
Over the past year, the rise in food prices, which is slowing (6.9% in 2023 on food excluding fresh products compared to 7.9% in 2022, while fresh products increase to 8.8 % against 6.6% in 2022), was offset by the easing of energy prices (notably gas and oil, while electricity continued to rise).
In December, inflation rose to 3.7% year-on-year, a slight jump compared to November (3.5%), due to the acceleration in the prices of energy and services at the end year, detailed INSEE confirming its first estimate.
Fueled by post-Covid supply difficulties then the surge in energy precipitated by the war in Ukraine, inflation jumped to 6.3% over one year in February 2023, a level at the highest in France in almost four decades. Since then, prices have continued to increase, but less sharply. Inflation thus reached 3.7% over one year in December, according to provisional data from INSEE, after 3.5% in November, a jump attributed to a further acceleration in energy prices and those of services.
The slowdown is particularly marked for food prices, which last year overtook the energy sector as the main driver of inflation. After peaking at almost 16% in the spring, the increase amounted to 7.1% year-on-year in December. The trend towards relaxation is expected to continue in 2024.
The crisis is “behind us”, according to Bruno Le Maire
The inflationary crisis is ” behind us “ in France, the Minister of Economy and Finance Bruno Le Maire rejoiced in December. However, he admitted that prices would not return to their pre-crisis level, notably due to the cost of the energy transition.
In its latest forecasts published in mid-December, INSEE expects inflation to be 2.6% over one year next June, and even 1.9% for food. Driven by wage increases, services – which represent around half of the household consumption basket – would become the main contributor to the price rise, without however causing the price-wage loop to spiral out of control.
For its part, the Banque de France predicted that inflation would reach 5.7% on annual average in 2023 and fall to 2.5% in 2024, measured here according to the harmonized consumer price index (HICP) allowing a comparison between European countries.
Tuesday, the governor of the institution François Villeroy de Galhau praised the effectiveness, in curbing prices, of the rate increase carried out by force by the European Central Bank (ECB) since the summer of 2022, until the break declared last fall. However, he highlighted the possibility of a rebound “of a technical and temporary nature” of the rise in prices. Geopolitical risks also remain present, notably tensions in the Middle East, almost two years after the start of the Russian invasion in Ukraine.