In a recent report, the National Institute of Statistics and Economic Studies (Insee) has confirmed a drop in prices. The report reveals that the consumer price index in France rose by 3.1% over a one-year period in January, a notable decrease compared to the inflation rate observed in December, which was 3.7%.
The report attributes the decline in inflation to a year-on-year deceleration in energy prices, which rose by just 1.9% compared to 5.7% in December 2023. Prices for food (which saw a rise of 5.7% after December’s 7.2%) and manufactured goods (which rose by 0.7% after a 1.4% rise in December) also contributed to the slowdown. However, service prices saw a slight uptick in January 2024, increasing to 3.2% from December 2023’s 3.1%.
Underlying inflation, a key indicator monitored by central banks in their efforts to combat rising prices, also saw a deceleration at the beginning of 2024, settling at 3% in comparison to 3.4% in December. This metric measures inflation by excluding certain highly volatile products like food or energy.
In more detail, the deceleration in energy inflation can be largely attributed to a year-on-year drop of 3.6% in gasoline prices. Diesel prices also fell by 8.7% in January, while electricity prices saw a significant year-on-year increase of 23.2%.
In terms of food, prices for fresh products rose by 7.9% in January 2024, down from December 2023’s 8.8%. Other food products saw inflation drop to 5.3% in January, a noticeable deceleration from the previous INSEE report, which recorded a 6.9% rise.
Lastly, the slight rise in service costs can be largely attributed to higher prices in transport (with rail transport costs rising by 4% over a year and air transport costs rising by 8.7%), accommodation services (which rose by 2.1%) and insurance (which saw a 7.4% increase).
The Harmonized Index of Consumer Prices (HICP), a benchmark indicator at the European level, saw a year-on-year increase of 3.4% in January, down from December’s 4.1% increase.
