French Inflation Rate Steady at 1.1% in August

The annual inflation rate in France is expected to came in at 1.1 percent in August 2019, unchanged from the previous month and slightly above market expectations of 1.0 percent, a preliminary estimate showed. The services prices should increase at the same pace while those of energy and tobacco are likely to ease. At the same time, manufactured goods cost is anticipated to fall more.

Prices are set to advance at the same pace for services (1.1 percent) and to slow down slightly for energy (0.7 percent vs 0.8 percent) and tobacco (8.7 percent vs 8.8 percent). In addition, cost of manufactured goods is expected to fall more markedly (-0.9 percent vs -0.6 percent). Contrastingly, inflation should accelerate for food (3.2 percent vs 3.0 percent), mostly driven by fresh food (8.3 percent vs 6.8 percent).

On a monthly basis, consumer prices are expected to recover significantly by 0.5 percent, after a 0.2 percent decrease in the prior month. Prices should be driven mainly by the seasonal rebound in manufactured goods prices after the end of summer sales in metropolitan France and by the equally seasonal rise in the prices of certain tourism-related services. In addition, food prices should continue to rise mainly due to fresh foods. Tobacco and energy prices should be stable this month. The increase in electricity prices should be offset by lower prices for petroleum products and domestic gas.

The harmonized index of consumer prices is estimated to rise 1.2 percent from the previous year (vs 1.3 percent in July) while it is expected to rise 0.5 percent month-over-month (vs -0.2 percent in July).

French Inflation Rate Steady at 1.1% in August

INSEE | Luisa Carvalho |
8/30/2019 7:55:29 AM