France Inflation At 2-Year Low

(RTTNews) - France's consumer price inflation hit a two-year low in January on marked fall in inflationary pressures for food, energy and manufactured products.

Consumer price inflation slowed to 3.1 percent from 3.7 percent in December, provisional data from the statistical office INSEE showed on Wednesday. This was the lowest inflation since January 2022.

The slowdown reflects the developments in prices of energy, food and manufactured products.

Food price inflation weakened to 5.7 percent from 7.2 percent and the increase in energy slowed sharply to 1.8 percent from 5.7 percent. Manufactured product prices growth halved to 0.7 percent from 1.4 percent.

On the other hand, services cost posted a faster growth of 3.2 percent following a 3.1 percent increase.

EU harmonized inflation also softened in January, to 3.4 percent from 4.1 percent in December. The rate was slightly above forecast of 3.3 percent.

On a monthly basis, both consumer prices and the harmonized index of consumer prices were down 0.2 percent, in contrast to the 0.1 percent rise in December.

ING economist Charlotte de Montpellier forecast inflation to remain close to 3.0 percent for the first part of the year, before slowing gradually towards 2 percent in the second half.

For the full year, inflation could be close to 2.5 percent, the economist added.

Another report from the statistical office showed that producer prices in the domestic market declined 0.9 percent annually following a 0.3 percent rise in November. Prices were 32 percent above their 2021 average level.

Month-on-month, producer prices edged up 0.1 percent, following November's 2.3 percent increase.