French architecture in France

France Inflation January 2023

France: Harmonized inflation comes in at highest level since November 2022 in January

Harmonized inflation inched up to 7.0% in January from December’s 6.7%. January’s result represented the highest inflation rate since November 2022. The bounce back in price pressures was primarily due to rising prices for food and non-alcoholic beverages. In addition, price pressures for transportation rose at a stronger rate.

Annual average harmonized inflation rose to 6.2% in January (December: 5.9%). Meanwhile, consumer price inflation ticked up to 6.0% in January, from the previous month’s 5.9%.

Lastly, harmonized consumer prices rose 0.45% from the previous month in January, swinging from the 0.09% drop recorded in December. January’s figure was the highest reading since October 2022.

While most other large European countries saw their January inflation rate decline, France’s inflation rate rose. The difference was caused by rising energy prices amid the end of fuel rebates and lower gas and electricity subsidies. As such, France’s inflation should peak in Q1 2023, later than most European neighbors.

Commenting on the outlook, Charlotte de Montpellier, senior economist at ING, noted:

“Headline and core inflation could continue to rise in France in February.[…] As a result, French inflation will soon be higher than in neighbouring countries. […] Ultimately, average inflation in 2023 in France will probably be higher than in 2022 but the annual profile will be fundamentally different, with a peak that could reach 6.5% in the first quarter, and then a gradual decline from the summer onwards.”

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