Highlights: Price increases in France slow to 5.1% year-on-year in May. First time in a year that inflation has slowed so much. lull is driven by the energy, manufactured products and services sectors. In April, household consumption, the country's growth engine, fell by 1%. A finding that darkens the economic outlook, while the peak of price increases has probably passed, according to the governor of the Bank of France. But this drop in the price spiral in supermarkets is insufficient for the government.

Inflation slowed sharply in May in France, an improvement however clouded by household consumption which accentuated its decline and augurs well for months to come...

Price increases in France slow to 5.1% year-on-year in May

Inflation slowed sharply in May in France, but this improvement was overshadowed by household consumption, which deepened its decline and augurs more difficult months ahead for the country's economy. Prices continued to increase year-on-year in May, by 5.1%, but less strongly than in previous months (5.9% in April and 6% at the beginning of the year), according to INSEE.

Inflation in France slows in May 2023. © CHRISTOPHE SIMON / AFP

Text by: RFI Follow

Advertising

This is the first time in a year that inflation has slowed so much. This lull is driven by the energy, manufactured products and services sectors, according to INSEE. Food inflation also fell to 14.9% in May against 14.1% in April.

The increase in the price of fresh products (+10.4% over one year) continued at almost the same pace as in April (+10.6%), but the cost of other food products rose less rapidly (14.8% against 15.8% in April). The disinflation is even sharper for energy, whose prices rose 2% year-on-year in May, after a jump of 6.8% in April and double-digit growth in recent months.

The cost of manufactured goods (+4.1% year-on-year in May) and services (+3%) is also decelerating, but less rapidly. Tobacco, whose cost jumped 9.8% year-on-year in May, is the only exception to the disinflation movement and its price accelerates for the third consecutive month, notes INSEE.

In May 2023, consumer
prices increased by 5.1% year-on-year 👉https://t.co/EcDRxH86LN

— Insee (@InseeFr) May 31, 2023

Households cut spending

But this drop in the price spiral in supermarkets is insufficient for the government. Bruno Le Maire continues to put pressure on manufacturers: "The big industrialists have made commitments in my office to return to the commercial negotiation table with distributors to translate this drop in inflation into prices on the shelves. The commitment for the time being has not been kept. Either the big industrialists keep their commitments, or I will use the fiscal instrument to recover the margins they have to return to consumers.

Consumers continue to cut spending in the face of inflation. In April, household consumption, the country's growth engine, fell by 1%. A finding that darkens the economic outlook, while the peak of price increases has probably passed, according to the governor of the Bank of France.

>> Read also: France: a high school student launches an anti-inflation application to help save money

Price increases in France slow to 5.1% year-on-year in May

Price increases in France slow to 5.1% year-on-year in May

Households cut spending

You may like

Trends 24h

Latest