French Inflation Slows to 1.8% in December Falling Below Forecasts

According to preliminary data from INSEE, French inflation rose to 1.8% year-on-year in December, falling short of the anticipated 1.9%. While slightly higher than November’s 1.7%, the harmonized inflation rate, used for eurozone comparisons, highlighted weaker-than-expected price growth. Notably, manufactured goods prices dropped 0.4%, continuing a downward trend, while energy prices rebounded with a 1.2% increase after a decline in the previous month.

Service and tobacco prices held steady, contributing to the slight rise in overall inflation from November to December. Key drivers included increased transportation costs and higher petroleum product prices. The rise was also reflected in France’s own consumer price index (CPI), which remained steady at 1.3% year-on-year for the second consecutive month.

Economists view these numbers as a signal of moderated price pressures within the eurozone’s second-largest economy. The data underscores France’s resilience in maintaining relatively low inflation compared to other European nations, despite fluctuations in energy prices and a slight increase in service costs.