Inflation slowed to +2.3% year on year in March, household consumption stagnated

Inflation in France slowed to +2.3% year-on-year in March after rising 3% in February, according to preliminary INSEE data. This “decline in inflation” will be “due to a slowdown in food prices throughout the year (+1.7% in March after +3.6% in February),” services, energy and industry. Tobacco prices also slowed particularly in March year-on-year, reaching +10.7% after +18.7% in February.

In addition, price growth also slowed over one month to +0.2% in March compared to +0.9% in February. “This slowdown is due to a slight fall in energy prices, especially gas and petroleum products,” INSEE said.

Conversely, “prices for industrial products will accelerate” in one month in March “due to a seasonal increase in clothing prices after winter sales,” the institute points out.

Inflation is an indicator closely watched by investors as it heavily influences the monetary policies of central banks, which aim to bring it below the 2% mark through their policy of raising their now stabilized rates. Investors are now waiting for any signs that could trigger the first rate cut promised in the spring. The benchmark indicator at European level, the harmonized index of consumer prices (HICP), increased 2.4% year-on-year in March, following a 3.2% increase in February.

Consumption is stagnating

At the same time, according to INSEE, consumption of French households in February was stable compared to January. In February, the stability was due to a fall in energy consumption (-2.7%), “balanced”, according to the National Institute of Statistics, by an increase in food consumption (+0.8%) and consumption of industrial goods (+0.5%). .

Over the twelve months, consumption fell by 0.8%, but in the last three months it has been stable compared to the previous three months. The new growth in food consumption (after 0.2% in January) is explained by an increase in purchases of almost all food products, with the exception of purchases of oils and fats, which decreased slightly, and tobacco consumption, which decreased again, explains. INSE.

On the other hand, households have compromised. According to INSEE, spending on textile clothing fell (-0.6% after +0.4% in January), and consumption of “other industrial goods” fell slightly (-0.2%). The drop is particularly due to a decline in purchases of DIY goods and fragrances, according to INSEE. .