French Inflation Rate at Near 2-Year Low in May

France's annual inflation rate is expected to fall to 1 percent in May 2019 from 1.3 percent in the prior month, a preliminary estimate showed. That should be the lowest rate since September 2017, amid a slowdown in prices of services, energy and food and a faster drop in those of manufactured products. In contrast, tobacco cost must rise at a quicker pace.

Prices are expected to soften for services (0.7 percent vs 1.0 percent in April); food (2.3 percent vs 2.5 percent), namely fresh food (2.3 percent vs 3.7 percent); and energy (3.4 percent vs 4.8 percent). Also, manufactured products cost is seen falling further (-0.6 percent vs -0.5 percent). In contrast, tobacco products are set to become more expensive (9.1 percent vs 8.1 percent). 

On a monthly basis, consumer prices are expected to advance 0.2 percent, easing from a 0.3 percent increase in April and below market expectations of a 0.3 percent rise. Services prices should fell back in the wake of those in transport and energy prices should slow down. On the other hand, food prices should be more dynamic than in April, due to a rebound in fresh product prices. The prices of manufactured goods and tobacco should rise slightly more than in the previous month.

The harmonized index of consumer prices is expected to rise 1.1 percent from the previous year (vs 1.5 percent in April) and by 0.2 percent month-over-month (vs 0.4 percent in April).

French Inflation Rate at Near 2-Year Low in May

INSEE | Luisa Carvalho |
5/29/2019 10:20:29 AM