Has France won the fight against inflation?

Has France won the fight against inflation? Not yet, but the governor of the Bank of France, Francois Villeroy de Galhou, wants to reassure about its development: “We will bring inflation down to 2% by next year”That, he expects, will surely banish the specter of recession.

Experts agree on the decline in inflation in France, which affects some products despite the increase. Francois Villeroy de Galhau, governor of the Bank of France, shares this view. He wants to be very optimistic, dismissing the specter of a recession, even as he says he remains vigilant: “We are winning the war against inflation,” He said this on Wednesday March 13 Franceinfo. “Victory is in sight” even though “We, the Bank of France and the European Central Bank (ECB), remain very vigilant until the end”, he added.

Returning to the inflation curve, he takes his stock and anticipates the future with less apprehension. “A year ago, we had peak inflation in France at 7%. Today, we are back at 3% and “barring any surprises”, “we will bring inflation down to 2% by next year”, he said. Francois Villeroy de Galhoun assured.

A reduction in inflation does not mean a return to old prices

The latter, however, would clarify that a reduction in inflation does not mean that ” that prices go back to the price of two or three years ago (…) There is, he insists, no going back to prices, because there is no looking back at pensions and salaries, which increased during this time. was ».

Returning to the government measures put in place, the Governor of the Bank of France feels that indexation to inflation is limited to only the minimum wage, leaving out other wages. “Negotiations within a company or within a sector”

It is a good thing. It is convenient that ” It’s good to have a decentralized approach, because really, if everything was indexed, it would mean that salaries go up, prices go up, and so on. »Which will give way to an inflationary spiral.

Towards better acceleration of growth from 2025

Addressing the growth chapter, the guest of Franceinfo notes that “The French economy has a certain resilience”, which however “slowed down significantly after the Russian invasion of Ukraine”.. For the first quarter of 2024, the Banque de France expects growth of 0.2%. As a reminder, the Atal government has lowered its growth forecast for the year 2024 from 1.4% to 1%.

The Banque de France, which had initially expected 0.9% growth, revised its rate up to 0.8%. For François Villeroy de Galhau, these fluctuations are valid for “The margin of uncertainty”.

explained by “The mechanical effect of the photo early in the year, which economists call growth carryover, as growth remained somewhat weaker than expected at the end of 2023”, That explains. Finally, the governor of the Banque de France has a plan “This disinflation will lead to a fairly significant acceleration in growth in 2025 and 2026.”