France Inflation Rate Slows in June


French annual inflation eased to a nearly five-year low 0.5 percent in June of 2014 from 0.7 percent in the previous two months, as prices of food and manufactured products dropped further.


Year-on-year, prices of manufactured products fell by 1.2 percent in June of 2014, from -0.8 percent in the previous month. This decrease was partly linked to a time lag in the price collection calendar, which included a higher number of days during the summer sales in June this year than last year. This has significantly contributed to the fall of prices of clothing and footwear (-1.5 percent in June from +0.2 percent in May of 2014). In addition, prices declined for health products (-2.8 percent from -2.6 percent) and food (-1.5 percent from -0.9 percent). Energy prices increased 1.0 percent.

The core inflation indicator decelerated to an annual 0.1 percent in June of 2014, down from 0.3 percent in May of 2014, partly due to the time lag in the price collection calendar. 

On a monthly basis, consumer prices remained flat for the third consecutive month at 0.0 percent. Prices of services increased by 0.2 percent in June of 2014, mainly due to the seasonal price increases at the beginning of the summer holidays. Prices went up for accommodation services (3.8 percent in June of 2014), rentals for holiday residences (2.3 percent) and air fares bounced back (5.0 percent). In contrast, cost of package holidays fell 8.7 percent in June after the spring holidays and before the summer holidays. Moreover, prices of health services rose slightly in June of 2014 (+0.2 percent) while cost of phone services slowed down (-0.1 percent).

France Inflation Rate Slows in June


INSEE | Isabel Felino | isabel.felino@tradingeconomics.com
7/10/2014 4:36:56 PM