France’s inflation accelerated to a 5-month high in February after easing to a 5-year low in January, while the economy logged slower growth as estimated in the fourth quarter, official data revealed Friday.
The consumer price index rose 1.0 percent yearly in February, faster than the 0.3 percent increase in January, which was the lowest inflation since December 2020. This was faster than the expected growth of 0.8 percent.
Similarly, EU harmonized inflation climbed to 1.1 percent in February from 0.4 percent in the prior month, preliminary data from the statistical office INSEE showed.
The rise in CPI inflation was partly due to a less pronounced decline in energy prices due to the base effect on electricity costs. The fall in energy prices softened to 3.0 percent from 7.6 percent.
Similarly, prices for manufactured products fell at a slower pace of 0.3 percent versus a 1.2 percent drop a month ago. Meanwhile, food inflation rose to 2.1 percent from 1.9 percent, and services inflation increased somewhat from 1.7 percent to 1.8 percent.
On a monthly basis, consumer prices rebounded 0.7 percent after a 0.3 percent fall in January. Likewise, the harmonized index of consumer prices rose 0.8 percent, reversing last month’s 0.4 percent decrease.
Another report from the INSEE showed that producer prices in the domestic market fell 2.3 percent in January from a year ago, after a 1.9 percent drop in December. Month-on-month, producer price inflation rose to 0.5 percent from 0.3 percent.
The French economy grew at a slower pace of 0.2 percent in the fourth quarter, as estimated, following a 0.5 percent rise in the third quarter.
Household consumption grew 0.4 percent, and government consumption rose 1.7 percent. The growth in gross fixed capital formation eased to 0.3 percent from 0.8 percent. Overall, final domestic demand excluding inventories contributed 0.3 points to GDP growth, which was 0.4 percent in the third quarter.
Exports advanced 1.0 percent, while imports were down 1.1 percent. As a result, foreign trade contributed 0.7 points to GDP growth. Finally, the contribution of changes in inventories to GDP growth was -0.8 points.
In another report, the INSEE revealed that payroll employment dropped marginally by 0.1 percent sequentially after showing stability in the third quarter. Both private and public payroll employment fell 0.1 percent and 0.3 percent, respectively.
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