After experiencing a slight uptick in December, inflation appears to have resumed its decline. According to provisional data published by INSEE this Wednesday, consumer prices rose by 3.1% at an annual rate in January. They rose to 3.7% from 3.5 in December. The slowdown earlier in the year also worries the harmonized consumer price index (HICP). If the figure is confirmed at the end of the month, inflation will begin 2024 at its lowest level in nearly two years.
In one month, the price also decreased. According to these first provisional figures, they fell 0.2% (after rising 0.1% in December).
Increase in prices of services and tobacco
According to INSEE, this drop in inflation has been due to a slowdown in prices of several categories of products over a year. Starting with energy, which showed a 1.8% year-on-year increase in January, up from 5.7% in December.
As trade talks between major retailers and their agri-food suppliers ended this Wednesday evening, food prices are also falling: they rose to 5.7% in January after 7.2% a month earlier. The recession also concerns fresh produce.
Further, the decline in the general level of inflation will be linked to a slowdown in the prices of manufactured products, which rose only 0.7% in January (1.4% in December). In contrast, prices of services and tobacco are rising rapidly. Later, after the new increase on January 1, the annual rate of increase reached 16.8%.
A recession that is expected to continue
This resumption of inflation is good news for the executive following the disappointment from the growth figures published by INSEE on Tuesday. And that starts the year 2024 which risks being less easy than hoped.
It indeed reinforces the view of a sustained decline in inflation in the coming months. “I am committed to ensure that inflation falls sharply at the beginning of 2024. This will be the case: the commitments I make, I keep them,” warned Bruno Le Maire, interviewed on CNews and Europe 1 before the official this Wednesday morning. . Publication of results. In early January, while presenting his wishes, the Minister of Economy assured that “we will stay below 3% inflation during the first half of the year”. A view has also been adopted by the Bank of France.
For his part, in an interview given to “La Tribune Dimanche” last week, the governor of the Bank of France, Francois Villeroy de Galhou, also estimated that “inflation will return to 2% by 2025. Far from its peak in February 2023 and in the autumn of 2021, France At a level close to that experienced.
