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PARIS: Inflation is slowing but consumers are not at the end of their troubles: the consumer price index stood at 5.6% in March over one year, against 6.3% in February, the The calming of energy prices being overshadowed by the continued rise in the cost of food.

The first estimate of the consumer price index for March published Friday by the National Institute of Statistics and Economic Studies (Insee) is 0.1 point higher than analysts’ forecasts from financial data provider Factset, but its slowdown accentuates a trend already observed in recent days in other major euro zone countries.

On the good news side, energy prices rose by just under 5%, a much slower rise than that recorded in February (14.1% over one year) and six times less than the jump in nearly 30% observed between March 2021 and March 2022.

A year ago, the outbreak of the Russian military offensive in Ukraine completed the spike in electricity and gas prices, already on the rise, and precipitated the return of inflation rates not seen for years. 1980.

Another consequence of the conflict, the prices of food products have exploded and have now taken over from energy as the main driver of inflation in France.

Consumption at half mast

Over one year, food prices jumped 15.8% in March, after rising 14.8% in February, according to an initial estimate from the National Institute of Statistics and Economic Studies (Insee). , which will have to be confirmed in mid-April.

In detail, fresh products rose by 16.6% over one year (after 15% in February), and other food products by 15.6% (against 14.8%).

“In the coming months, food inflation should remain the biggest contributor to the rise in consumer prices in France,” warns Charlotte de Montpellier, an economist at ING bank.

Distributors and suppliers have indeed agreed, during their annual negotiations, to price increases of around 10%, the impact of which on shelf prices should be “gradual during the second quarter of 2023”. , according to Charlotte of Montpellier.

The purchases of the French are affected: household consumption fell by 0.8% over one month in February, according to data published by INSEE.

The decline in food purchases was even sharper (-1.2% over one month in February, after rising 0.6% in January). “The consumption of agricultural products is decreasing, as is that of agri-food products”, commented INSEE.

Conversely, tobacco consumption experienced a “clear rebound” in February, its price having increased by only 0.2% over one year. The situation could be different in March, since tobacco prices this time jumped by nearly 8% over one year.

Inflation has in any case dealt a big blow to the morale of the French, still down in March and close to its historic low according to data published Wednesday by INSEE.

But France and Europe could soon see better days.

Germany and especially Spain unveiled Thursday inflation rates in sharp slowdown in March, pending the first estimate of Eurostat for the entire euro area expected Friday late morning.

The Netherlands followed suit on Friday, unveiling inflation of 4.4% in March year on year, significantly lower than the 8% recorded in February.

In an interview with the German weekly Die Zeit, the chief economist of the European Central Bank Philip Lane predicted on Wednesday a “rapid decline in inflation at the end of this year” in the euro zone.