French December Inflation Rate Confirmed at 8-Month Low

France's inflation rate stood at 1.6 percent in December 2018, unrevised from the preliminary estimate and below November's final reading of 1.9 percent. It was the lowest inflation rate since April, due to a slowdown in energy, services and tobacco prices and a larger drop in manufactured product prices.
INSEE | Joana Ferreira | 1/15/2019 9:37:00 AM
Energy inflation eased to 8 percent in December from 11.2 percent in November as cost of petroleum products rose at a slower 9.5 percent (vs 14.7 percent in November). In addition, services inflation declined to 0.9 percent from 1 percent, as prices of other services increased at softer rate (1.9 percent vs 2 percent), while decreases were seen in prices of communication (-3.5 percent vs -3.6 percent), health services (-0.4 percent vs 0.3 percent), and actual rentals and services for dwellings (-0.3 percent, the same as in November). Meanwhile, transport inflation picked up to 0.5 percent from 0.3 percent. Manufactured products prices continued to fall (-0.5 percent vs -0.3 percent), led by declines in costs of medical products (-3 percent vs -2.2 percent) and clothing and footwear (-0.3 percent vs -0.1 percent). Meanwhile, other manufactured products prices were unchanged in December, after rising by 0.2 percent in the previous month.

On the other hand, food inflation rose to 2.5 percent in December from 1.9 percent in November, boosted by fresh food (7.8 percent vs 5 percent) and other food (1.6 percent vs 1.4 percent).

Annual core inflation, which excludes public sector prices, the most volatile consumer prices and the tax measures stood at 0.7 percent, the same as in November.

On a monthly basis, consumer prices were flat in December, also unrevised from the preliminary estimate and following a 0.2 percent fall in November. A sharp drop in energy prices (-2.4 percent vs -0.7 percent) and a downturn in those of manufactured products (-0.2 percent vs 0.1 percent) were offset by a rebound in prices of services (0.4 percent vs -0.3 percent) and food (0.6 percent vs -0.2 percent).

The harmonised index of consumer prices rose 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 December Inflation Rate Confirmed at 8-Month Low