The light at the end of the tunnel? According a first estimate published this Wednesday, May 31 by the National Institute of Statistics and Economic Studies (Insee), inflation slowed markedly in France in May to stand at 5.1% over one year, after reaching 5.9 % in April and more than 6% at the start of the year.
“For the first time in a year, the annual shift in consumer prices in France is falling from its plateau which was around 6%. This decline is more marked than expected”, commented on Twitter the head of the business cycle department of INSEE Julien Pouget. The information was greeted with great optimism by the Governor of the Banque de France, François Villeroy de Galhau, who explained that it “is very likely that we have passed the peak of inflation”.
This high inflation, generalized throughout Europe and which reached levels not seen for forty years, was caused last year by the sudden increase in the cost of energy, in particular because of the supply difficulties that created the Russian invasion in Ukraine. It is also explained by the rise in the price of certain raw materials such as wheat or rapeseed. According to the UFC Que Choisir association, for the same shopping basket, it was necessary to pay 101 euros in January 2022, against 126.70 euros in May 2023.
Lower energy and service prices
This phenomenon of disinflation is clearly driven by certain goods and services. This slowdown in inflation would be due to the fall “over one year in energy prices […] manufactured goods and services”, but also food, up 14.1% over one year in May after growing 15% in April, said Insee in a press release. Disinflation is even clearer as regards energy, whose prices increased by 2% over one year in May, after a jump of 6.8% in April and a double-digit increase in recent months.
The price of certain other services does not change significantly downwards. Thus, the increase in the price of fresh produce continued at almost the same pace as in April. The same is true for tobacco, the cost of which jumped 9.8% year on year in May. Its price is even on the rise for the third month in a row.
The food industry does not keep its promises
Inflation is starting to slow its course, but the government wants this momentum to be even more pronounced. “We must accelerate the decline“announced Bruno Le Maire at the microphone of France Inter this Wednesday. He recalled that the 75 largest food manufacturers had committed “in his office” to translate this price drop on the shelves, but that the commitment had “not been kept for the moment.”
The Minister of the Economy also specified that he gave the companies in question until the beginning of June to take the necessary measures. Otherwise, Bruno Le Maire has announced that the government will use tax mechanisms to trim the margins of manufacturers who do not meet their price reduction commitments.