The slowdown in price increases is confirmed. After dropping below the symbolic 5% mark in June for the first time since April 2022, inflation slowed again in July, settling at 4.3%, according to an initial estimate by INSEE.
This deceleration is explained both by a lower increase in food prices (12.6% over one year compared to 13.7% in June) and a more marked drop than in June in energy prices (-3. 8% after -3%), details the National Institute of Statistics and Economic Studies, which is to publish a second estimate of the consumer price index on August 11.
Food prices slowed for the fourth consecutive month, both for fresh products (10.4% over one year after 11.2%) and other food products (13% after 14.1%). Manufactured goods also rose less rapidly than in June, thanks in particular to the summer sales. Their cost increased by 3.4% over one year against 4.2% the previous month.
Conversely, the prices of services accelerated slightly (3.1% over one year after 3%) during this school holiday period, while those of tobacco remained 9.8% higher than those practiced in July 2022, a percentage identical to that of June. “Over one month, consumer prices would be stable in July 2023, after 0.2% in June,” explains INSEE.
The slowdown in inflation has been noted by national statisticians, month after month, since the end of the first quarter of this year. A dynamic which is explained in particular by the slowdown in the rise in food prices, albeit limited, and by the 3% decline over one year in energy prices, explained the National Institute of Statistics and economic studies last month. Not enough to hope for a return “to the prices before” however, temper many observers, including the number two of Lidl in France.
The executive keeps an eye on the price curve, while the household portfolio has already been severely tested by several months of high inflation. Current driver of soaring prices, food prices are particularly scrutinized. In Le Parisien, in mid-April, Emmanuel Macron returned to the subject, being cautious to say the least: “I’m going to be honest, food prices, it’s going to be hard until the end of the summer”, had warned the head of state. Questioned on this subject this week, the President of the Republic had also promised that the government “would continue to support the most modest households, in particular those who most need to move”. Remarks confirmed by Prime Minister Elisabeth Borne, who wanted to be optimistic during an interview granted Wednesday to BFMTV. “I think that from the start of the school year, we will see a slowdown in this inflation following the negotiations in progress”, she declared in particular, explaining “to expect a lot from the negotiations in progress between manufacturers and large retailers” .
For their part, the Banque de France and INSEE expect a gradual slowdown in inflation by the end of the year. This would reach “4.4% over one year in December”, according to national statisticians, when the last economic note from the institution headed by François Villeroy de Galhau estimated that the rise in prices “would gradually decline in the second part of 2023 and beyond, to return to around 2% by 2025”. Still, households continue to tighten their belts while waiting for a clearing. What limit their consumption, and participate in the overall slowdown of activity in France.