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France Inflation September 2022

France: Harmonized inflation softens thanks to fuel subsidies in September

Harmonized inflation fell to 6.2% in September, following August’s 6.6%. September’s result represented the lowest inflation rate since May. The print was driven by lower price pressures for energy and transport due to government fuel subsidies.

The trend pointed up, with annual average harmonized inflation coming in at 5.0% in September (August: 4.7%). Meanwhile, consumer price inflation fell to 5.6% in September, from the previous month’s 5.9%.

Finally, harmonized consumer prices fell 0.51% from the previous month in September, swinging from August’s 0.48% increase. September’s result marked the weakest reading since September 2020.

Commenting on the outlook, Charlotte de Montpellier, Senior Economist at ING, noted:

“[The decrease in inflation] is the consequence of various public policies and not a sign that underlying inflationary pressures are moderating. Inflation is expected to rise again at the end of the year, before falling very slowly in 2023, though less quickly than in other European countries. […] Furthermore, given the impact of the “tariff shield” on inflation, the question of whether or not this will be extended is central to the forecast. The government has hinted that it wishes to maintain a tariff shield in 2023 but that it will be adapted and that a 15% increase in gas and electricity prices could take place.”

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