Until when will inflation reach its highest level in France? In June 2023, answers François Villeroy de Galhau. On France 2, this Thursday, February 9, the Governor of the Banque de France explained that “we should know the peak of inflation, there, in the semester. And inflation will start to decrease in France, from mid-year, from June”. “The peak will be reached by June, and even perhaps before, and then it will be the decline,” he added.
Consumer price inflation picked up slightly in January. The inflation rate reached 6% over one year, after 5.9% in December, according to an initial estimate published Tuesday, January 31 by the National Institute of Statistics and Economic Studies (Insee). “This slight rise in inflation would be due to the acceleration in food and energy prices”, up 13.2% and 16.3% respectively over one year, estimated the Insee. Energy prices rebounded “due to the rise in the price of petroleum products, partly due to the end of fuel discounts, and that, subject to control, gas prices”.
As for food products, the rise in prices accelerated in January both for fresh products (+9.8% over one year after +9.3% in December 2022) and for other food products (+13, 8% after +12.6%). François Villeroy de Galhau acknowledged that this figure of 6% was “too” high even if it is “less than the European average”.
Tuesday, February 7, INSEE predicted that the rise in consumer prices would remain on “a plateau”, around 6% over one year in February, unprecedented levels in nearly four decades, before gradually declining to 5% in June. According to INSEE, the French economy should grow by 0.2% in each of the first two quarters of 2023 thanks to resilient industrial production. “We are in a rather hesitant economic situation, neither frankly favorable, nor frankly unfavorable”, summarized Julien Pouget.
The head of the business cycle department of the National Institute of Statistics, however, warned that although inflation should gradually fall, this does not mean “that the level of prices would fall, it means that overall, the price index would change more slowly than a year ago”. This drop in inflation simply means that “prices will increase more slowly”, also explained François Villeroy de Galhau, even if “some prices may go down”. Clearly, the purchasing power of the French will continue to be weighed down.
In interview at the JDD, on January 21, Michel-Édouard Leclerc, the president of the distribution brand, also explained that “inflation will continue at least for the first six months of 2023 and should peak between April and June”. “The increase in food prices in distribution reached an average of 12% in 2022 in hypermarkets,” he said.
In the long term, François Villeroy de Galhau has made a commitment to “bring inflation back to 2% by the end of next year or the beginning of 2025”. This 2% rate corresponds to “price stability”, he added. “Inflation is a bit like the temperature of the economy, 2% is the right temperature of the economy”, illustrated the governor of the Banque de France.
To try to help households cope, the government has planned to set up an anti-inflation basket in supermarkets. It will include products from around fifty categories “at the best price/quality ratio”. If the list, under arbitration, will be finalized in the next few days, according The Parisian, it should include five fruits and vegetables including three organic, two starchy foods, red or white meat including at least one labeled, fish but also dental hygiene products. However, no alcohol or sweets.
This anti-inflation basket on which the government is working with the brands of large retailers is “a gadget”, criticized Wednesday February 8 the UFC-Que Choisir with AFP. “How could 50 products meet the diversity of needs according to the types of consumers?”, noted Olivier Andrault, agriculture/food project manager for the consumer association. A large surface can have “several hundred thousand references”, he pointed out. In addition, explained Olivier Andrault, this basket is made up on the voluntary basis of the brands and the commitments are low as regards the price of the products making up the basket.
“In the absence of regulatory definition of these prices, an allegedly ‘broken’ price could only be the usual price. There is no commitment on the absence of price changes, and not on the level of comparability between products, the only way to ensure competition between brands and the moderation of margins”, lamented Olivier Andrault.
