This is a first since August 2021. The consumer price index rose by 1.9% year-on-year in August in France, a decline that brought the indicator below the symbolic 2% mark for the first time since August 2021, indicated INSEE on Friday August 30.
After reaching 2.3% over one year in July, inflation calmed down in August due to the “very clear slowdown in energy prices”, details the National Institute of Statistics and Economic Studies in this provisional estimate, which will have to be confirmed in September.
Germany also falls below the 2% mark
The cost of energy thus increased by only 0.5% over one year in August 2024, whereas it had jumped by almost 7% a year earlier, “mainly due to […] of the increase in regulated electricity prices applied from August 1, 2023”, recall the national statisticians.
Food prices also increased by 0.5% year-on-year in August, the same pace as in July, while services – which weigh the most heavily in the indicator – rose by 3.1% year-on-year, whereas their prices had only increased by 2.6% year-on-year in July.
At 1.9%, the consumer price index (CPI) thus falls below the 2% inflation target pursued by the European Central Bank (ECB), as Germany did on Thursday for the first time since March 2021.
But rather than the CPI, the indicator used by the Central Bank to compare inflation from one European country to another is the harmonized index of consumer prices (HICP), which for its part rose by 2.2% over one year in August (after +2.7% in July), indicates INSEE. “The main difference between the HICP and the CPI concerns health expenditure: the HICP follows prices net of social security reimbursements while the CPI follows gross prices,” explains the Institute.
An upward revision of the CPI in the second estimate, expected on September 13, also remains possible. In May and June, INSEE had revised its first inflation estimate upwards by 0.1 points.