France’s Inflation Slows Sharply to 1.8 Percent in June as Energy Price Growth Decelerates
French consumer price inflation slowed to 1.8 percent in June from 2.4 percent in May, the statistics office INSEE confirmed on Friday, matching its flash estimate. The EU-harmonised measure eased to 2.0 percent from 2.8 percent. On the month, consumer prices fell 0.3 percent, with the monthly CPI change revised down 0.1 point from the provisional reading.
The slowdown was driven by a sharp deceleration in energy prices, which rose 11.0 percent from a year earlier after 16.6 percent in May, with petroleum products up 19.7 percent after 31.1 percent. Energy costs are still rising strongly on the year, but far more slowly than at the peak of the shock. Food prices rose 0.9 percent, services 1.9 percent and manufactured goods prices fell 1.1 percent.
Headline inflation slowed by 0.6 percentage point in a single month and the harmonised rate by 0.8 point, as the energy inflation rate dropped 5.6 percentage points, our calculation.
Why it matters: France’s reading suggests the war-driven energy shock is fading from its inflation profile, which eases pressure on the European Central Bank and supports household demand in one of MENA’s key trading partners. For the region’s exporters, a European consumer recovering purchasing power is a supportive signal for trade and tourism flows.
Outlook: The markers are the euro area’s July flash inflation reading, the ECB’s next meeting, and whether the energy deceleration extends as the comparison base shifts; INSEE’s next CPI release is due 14 August.
| Component, year on year | June | May |
|---|---|---|
| Headline CPI | +1.8% | +2.4% |
| Harmonised HICP | +2.0% | +2.8% |
| Energy | +11.0% | +16.6% |
| Petroleum products | +19.7% | +31.1% |
| Services | +1.9% | +2.1% |
| Food | +0.9% | +1.1% |
| Manufactured goods | -1.1% | -0.6% |
Sources: INSEE.
