The fight against inflation is one of Europe’s priorities. A struggle which explains the maintenance of rates at a high level by the European Central Bank. This policy has started to bear fruit. Indeed, inflation has started to decline since 2023, particularly in France.
Inflation had recorded a slowdown in France in 2023 compared to the previous year. The increase in consumer prices reached a rate of 4.9% on average, compared to 5.2% in 2022, according to an INSEE report, published on January 12.
This downward trend was confirmed this Wednesday, January 31 by the same institute which indicates that, according to its first estimates, inflation slowed to 3.1% over one year in January, compared to 3.7% in December.
The fall in energy prices has impacted inflation
The National Institute of Statistics and Economic Studies explains this drop in inflation by the decline in the prices of energy, food and manufactured products over one year, despite the acceleration in the prices of services and tobacco. In detail, over one month, consumer prices decreased slightly in January, a decline of 0.2%, while December saw an increase of 0.1%.
Reacting to this decline in inflation, the Minister of the Economy, Bruno Le Maire, declared on CNews and Europe 1: “ I am committed to ensuring that inflation will decrease rapidly at the start of 2024. This will be the case: the commitments I make, I keep them”. This senior official therefore declares victory even if the battle is still tough, knowing that energy prices can soar at any time due, in particular, to tensions in the Red Sea.
It must also be said that if inflation has fallen, it is mainly due to the relative stability of energy prices. In fact, these prices only increased by 1.8% in January 2024, while in January 2023, they reached an increase of 5.7% over one year. Concerning the prices of food products, they increased by 5.7% year-on-year in January, while in December, they increased by 7.2%.
Furthermore, the prices of fresh produce still remain high. Inflation in this sector is +8.3% in January 2024 compared to January 2023, compared to +8.8% in December. Manufactured products, for their part, fell sharply to reach inflation of only +0.7% this January.