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Inflation in France to stabilise by autumn

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Paris, June 25 (Ajit Weekly News) Following a steady growth during the summer, the year-on-year inflation in France is expected to stabilise between 6.5 and 7 per cent in the autumn, the country’s National Institute of Statistics and Economic Studies (INSEE) said.

At the same time, the annual inflation should be around 5.5 per cent in 2022, up from 1.6 per cent in 2021, Xinhua news agency quoted INSEE as saying.

According to the Institute, the yearly consumer price index (CPI) reached 5.2 per cent in May, a peak not seen since 1985.

This can be put down to household consumption, the weight of energy in prices and the recent measures to limit inflation, the institute said.

Capping regulated gas and electricity prices helped to reduce inflation by about two percentage points in May, the INSEE said.

Provided that the “tariff shield” is upheld until the end of the year, inflation fuelled by high energy prices is expected to decrease progressively until the end of the year.

Nevertheless, due to an increase in production costs, the price of food and manufactured goods will increase, the Institute said.

The INSEE expects that growing inflation will trigger an automatic revaluation of the guaranteed minimum growth wage this summer or the beginning of autumn.

On the positive side, it foresees a possible improvement in purchasing power in the second semester due to the additional income support measures.

However, the yearly purchasing power will, on average, decrease by 0.6 per cent, the INSEE estimates.

“The international economic environment is largely dependent on the geopolitical and health developments, but also on the reactions of the economic policy towards the increase in inflation.”

–Ajit Weekly News

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