ALBAWABA — France saw inflation accelerate for the second month in a row in February after an end-of-year pause, the National Institute of Statistics and Economic Studies’ provisional data reported on Tuesday.
Inflation reached 6.2 percent year-on-year, up from 6 percent annual increase last month, "this slight increase in inflation is down to acceleration of prices for food and services," French statistical office Insee said in its preliminary report on the February data.
Insee found that food prices jumped 14.5 percent year-on-year in February, accelerating from a 13.3 percent hike in January.
Service prices increased by 2.9 percent, faster than 2.6 percent in January, while manufactured goods picked up as well.
Driven by falling oil-based products, energy prices eased in February to 14 percent from 16.3 percent in the previous month.
France's February inflation rate was 7.2 percent year-on-year, 0.2 points faster than in January, seeing inflation rates at levels not seen since the 1980s after consumer prices began surging last year.
Insee also announced that France's gross domestic product grew by 0.1 percent for the fourth quarter of 2022, seeing full year GDP growth of 2.6 percent, following an increase of 6.8 percent in 2021.
“February data indicate that French inflation has still not peaked. Both headline and core inflation are likely to continue to rise in the coming months, giving the ECB further reason to continue raising rates beyond the first quarter,” Charlotte de Montpellier, senior economist for France and Switzerland at ING Group, a Dutch multinational banking and financial services corporation, wrote in an ING Snap.
“At the end of 2023, inflation will probably still be above 4 percent, a level higher than the European average. The deceleration in price developments is expected to continue in 2024, but will still be slow, averaging 2.6 percent over the year (3.5 percent for the harmonized index),” she noted.
“Ultimately, the French economy is likely to remain weak throughout 2023, but also in 2024. We expect growth of 0.7 percent both in 2023 and 2024,” De Montpellier concluded.
