Inflation in France Inches Up: December 2023 Overview

In December 2023, consumer prices in France edged up by 0.1% on a monthly basis, contributing to a 3.7% increase in prices over the year, according to the final results of the Consumer Price Index (IPC).

Monthly Dynamics:

  • On a monthly basis, the CPI saw a slight rebound of 0.1%, driven primarily by increased prices in the services sector (+0.6%), notably in transportation (+6.0%).
  • Food and tobacco prices remained stable on a monthly basis, while prices for manufactured goods decreased (-0.3%) along with energy prices (-1.2%).

Adjusting for seasonal variations, consumer prices increased by 0.3% in December 2023, following a decrease of 0.1% in November.

Yearly Changes:

  • Over the year, consumer prices rose by 3.7% in December 2023, compared to a 3.5% increase in November.
  • The acceleration in yearly inflation was driven by energy prices (+5.7%) and services (+3.1%), while prices for manufactured goods (+1.4%) and food (+7.2%) experienced a slowdown.

Underlying Inflation:

  • The underlying inflation rate, excluding volatile factors, decreased to +3.4% on a yearly basis in December 2023, down from +3.6% in November.

Harmonized Index:

  • The Harmonized Index of Consumer Prices (IPCH) showed a slight monthly increase of 0.1%, leading to a yearly rise of 4.1% in December 2023, up from 3.9% the previous month.

Sectoral Insights:

  • Energy prices surged by 5.7% on a yearly basis in December 2023, with moderate rebounds in prices of petroleum products and a notable acceleration in electricity prices (+18.9%).
  • Services prices increased by 3.1% over the year, led by a rebound in transportation costs (+2.1%) and accelerated prices for rents, water, and waste collection (+2.8%).

Manufactured Goods and Food:

  • Prices for manufactured goods increased by 1.4% on a yearly basis in December 2023, showing a slowdown compared to November.
  • The slowdown in food prices continued for the ninth consecutive month, with a yearly increase of 7.2%, down from 7.7% in November.

In summary, France experiences a marginal uptick in inflation at the end of 2023, driven by increased prices in the services and energy sectors. While underlying inflation shows a slight decrease, policymakers and analysts closely monitor these trends for economic implications.