The French had been warned: the month of March would be “red” for consumers’ wallets, with further price increases expected, especially in food. According to the final estimate of the National Institute of Statistics unveiled on Friday, inflation reached 5.7% in March over one year in France. INSEE, which had previously estimated inflation at 5.6% over one year last month, has therefore revised its estimate upwards. The harmonized index of consumer prices (HICP), used for comparisons at European level, stood at 6.7% year on year in March, against 7.3% last month.
Unsurprisingly, inflation is mainly driven by soaring food prices, its main driver. The rise in consumer prices, however, marked time compared to February (6.3%).
Over one year, food prices continued to accelerate, climbing 15.9% in March, after 14.8% in February. Both fresh products, such as fruit and vegetables, and non-fresh products such as bread, cereals, meat, cheese, chocolate or beverages are affected by this trend. Driven by clothing and footwear, the prices of manufactured products (4.8%) also recorded a slight increase in March.
Conversely, the rise in energy prices slowed sharply (4.9% in March after 14.1% in February) due to a sharp decline in petroleum products and a more modest deceleration in gas , which offset an acceleration in electricity prices. Similarly, service prices also slowed slightly in March (2.9% after 3% in February). Core inflation, which excludes the most volatile elements such as energy and certain food products, and thus makes it possible to identify a basic trend in price trends, rose to 6.2% over a year in March, after 6.1% in February.
Since the take-off in consumer prices, under the effect of the disruptions in post-Covid supply chains and then the war in Ukraine, the inflation rate has returned to levels not seen since the 1980s. It should gradually fall back to 5% in June, INSEE predicted in early February. But inflation will remain high in France until the end of 2023, “oscillating between 5.5% and 6.5%”, before falling back to around 3% at the end of 2024, the OFCE indicated on Thursday in its economic outlook. . As a result of this soaring price, household purchasing power should fall by 1.2% between 2022 and 2024, projects the French Observatory of Economic Conditions.
Invited on Tuesday on Europe 1, the Minister of the Economy Bruno Le Maire confirmed the forecasts of INSEE, indicating that “inflation should start to decline in mid-2023”. The prices of food products, fixed at the end of the annual negotiations in February concluded between manufacturers and distributors, are for the time being frozen on the rise. And this, despite the reduction in the energy bill incumbent on suppliers. of agrifood. To put an end to this paradox, the government has asked manufacturers and supermarkets to get back around the negotiating table to lower prices on the shelves “whenever this is objectively justified”, according to a letter revealed by Les Échos on Thursday. evening.
