French inflation reaches 3 -year low as energy prices fall

(MENAFN) Consumer price inflation in France dropped to its lowest annual level in three years in August, according to preliminary data released by the National Institute of Statistics and Economic Studies (INSEE) on Friday. The decline in inflation was largely driven by lower prices for petroleum products and electricity. The consumer price index, which measures inflation based on French standards, fell to 1.9 percent on an annual basis in August, down from a revised 2.3 percent in July. This figure marks the lowest inflation rate observed since 2021, and it came in slightly above the median forecast of a 1.8 percent increase. On a monthly basis, inflation rose by 0.6 percent in August, following a 0.2 percent increase in July. This rise was slightly higher than the expected 0.5 percent.

Inflation in France, when harmonized with the European Union's standards for easier comparison across the eurozone, also showed a slowdown. It declined to 2.2 percent year-on-year in August, compared to 2.7 percent recorded during the same month last year. Market expectations had predicted an average increase of 2.1 percent. These figures reflect a broader trend of easing inflation across Europe as energy prices, particularly for oil and electricity, continue to fall. However, while inflation is cooling, other economic indicators suggest a slowing momentum in the French economy.

Official data released on the same day revealed that the French economy grew at a slower pace than initially expected during the second quarter of the year. The economy expanded by 0.2 percent on a quarterly basis, below the French statistics agency's earlier estimate of 0.3 percent growth announced in July. This slower growth rate indicates that while inflationary pressures are easing, economic activity in France is also experiencing some deceleration, reflecting the complex economic landscape facing the country. 

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