French Inflation Rate Slows to 8-Month Low in December

France's annual inflation is expected to slow to 1.6 percent in December 2018 from 1.9 percent in the previous month. That would be the lowest rate since April due to a deceleration in the prices of energy, services and tobacco and a more pronounced drop in those of manufactured products.

Prices should rise at a softer pace for energy (8.2 percent vs 11.2 percent in November), services (0.9 percent vs 1 percent) and tobacco (12.8 percent vs 14.5 percent). In addition, manufactured products are likely to fall 0.5 percent, faster than a 0.3 percent drop in the previous month. By contrast, food inflation is set to pick up to 2.5 percent in December from 1.9 percent in November, boosted by both fresh food (7.8 percent vs 5.0 percent) and other food products costs (1.6 percent vs 1.4 percent).

On a monthly basis, consumer prices are expected to remain unchanged after a 0.2 percent decline in November. Energy prices should fall sharply, in the wake of petroleum product prices, and those of manufactured products should edge down after a slight rise in the previous month. Conversely, prices of services should pick up due to a seasonal rebound in airfares. Food prices should rise, after a drop in the previous month.

The harmonised index of consumer prices is expected to rise by 1.9 percent from the previous year (vs 2.2 percent in November) and by 0.1 percent month-over-month (vs -0.2 percent in November).

French Inflation Rate Slows to 8-Month Low in December

INSEE | Joana Ferreira |
1/4/2019 8:05:51 AM