The increase in food prices slowed significantly in September, offset, however, by an acceleration in energy that prevented the fall in inflation, in a context of sluggish household consumption.
In total, the increase in consumer prices stood at 4.9% year-on-year in September, a stable rate compared to August, the National Institute of Statistics (Insee) indicated on Friday.
Good news for households: the prices of food products, which were the main inflation factor for several months, have calmed down.
They continued to progress in September (+9.6%), but their growth registered a clear slowdown, while in August they had shot up 11.2% year-on-year.
The decline is especially pronounced in fresh products, which increased by 4.1% year-on-year in September after having increased by 9.4% in August.
The increase in services (+2.8% year-on-year in September) and manufactured products (+2.9%) was also less rapid.
“Appropriate” rate level
The governor of the Bank of France, François Villeroy de Galhau, sees this as proof of the “effectiveness” of the monetary policy of the European Central Bank, which has been raising rates at an unprecedented pace since July 2022.
According to the harmonized index (IPCA), which allows European countries to be compared, inflation in France stood at 5.6% year-on-year in September (compared to 5.7% in August). In the euro area, the annual inflation rate fell to 4.3%, after 5.2% in August, its lowest level since October 2021.
“This data reinforces our confidence that inflation in the eurozone and France will return to its 2% target by 2025, confirming that the current level of our key interest rates is appropriate,” François Villeroy de Galhau said on Friday in LinkedIn.
To counter this slowing trend, energy prices, which had fueled the inflationary shock after the invasion of Ukraine, before calming down, have begun to rise sharply again.
They rose 11.5% in one year, a rebound mainly attributable to the increase in the price of oil reflected at the pump.
The energy prices representing 10% of the consumption panier are included in the calculation of the consumption price index, the other food prices for the environment 16% and the services (hébergement and transports notamment) more than a half.
“To watch”
However, “they must be followed closely,” stressed Maxime Darmet, an economist at Allianz Trade, interviewed by AFP. “If energy continues to increase, companies could raise their prices again, for example in the food sector, which is a sector that consumes a lot of energy.”
Intending to make inflation its main “fight”, the French government has decided to grant a new check of 100 euros to low-income workers who use their vehicles.
But the executive also wants to involve companies, limited by a reduced budgetary room for maneuver at a time when he wants to reduce France’s heavy debt.
France’s public debt fell to 111.8% of gross domestic product (GDP) in the second quarter, compared to 112.5% in the previous quarter, although it remains above the symbolic threshold of 3 billion euros, according to the INSEE.
Economy Minister Bruno Le Maire declared on Thursday that he will ensure that agri-food manufacturers’ margins remain “reasonable”, while a bill aims to advance his trade negotiations with distributors to try to impact the slowdown in prices on the stores. faster.
Under pressure, the fuel sector has pledged to increase operations at “cost price” this year-end.
But if it begins to fall excluding energy, inflation will continue to weigh on household consumption.
In August it fell 0.5% in one month. The decrease is observed in food (-0.5%), energy (-0.6%) and manufactured goods (-0.5%).
“There is no engine that will allow a significant and lasting recovery in consumption. Households remain very cautious,” emphasizes Maxime Darmet.
Source: BFM TV
