France: Inflation stable in January
February 20, 2014
Consumer prices fell 0.6% over the previous month in January, which contrasted the 0.3% increase recorded in December and came in slightly below the 0.4% fall the market had expected. As the National Statistics Institute (INSEE) reported, the fall in prices was mainly driven by a sharp contraction in prices for clothing and footwear, while prices for transport and communication services also dropped in January. Tobacco products was the only category that registered a significant increase in prices.
In January, annual inflation remained at 0.7% for the third consecutive month, falling a tad below market expectations of 0.8%. The core inflation index, which excludes more volatile items such as oil, fruit and vegetables, registered a 0.4% contraction over the previous month, which was slightly down from the flat reading tallied in December. Annual core inflation fell from 0.6% in December to 0.1% in January.
Annual HICP inflation (based on the harmonized index of consumer prices) was stable at December's 0.8% in January. Meanwhile, annual average HICP inflation inched down from the 1.0% tallied in December to 0.9% in January, which marked the lowest rate since June 2010.
FocusEconomics Consensus Forecast panelists expect HICP inflation to average 1.2% in 2014, which is down 0.1 percentage points from last month's forecast. For 2015, panelists project that inflation will accelerate to 1.4%.