Insee unveiled its first estimates for inflation on Friday, August 30, with a clear slowdown in price increases in August over one year. A figure that will however need to be consolidated.
The consumer price index rose by 1.9% over one year in France in August, a decline that brings the indicator below the symbolic 2% mark for the first time since August 2021, INSEE said on Friday. After reaching 2.3% over one year in July, inflation calmed down in August due to the “very clear slowdown in energy prices”, details the National Institute of Statistics and Economic Studies in this provisional estimate, which will need to be confirmed in September.
The cost of energy thus increased by only 0.5% over one year in August 2024, whereas it had jumped by almost 7% a year earlier, “mainly due to […] the increase in regulated electricity prices applied on August 1, 2023”, recall the national statisticians. Food prices also increased by 0.5% over one year in August, a rate identical to that of July, while services – which weigh the most in the indicator – increased by 3.1% over one year, whereas their price had only increased by 2.6% over one year in July.
CPI or HICP?
At 1.9%, the consumer price index (CPI) thus falls below the 2% inflation target pursued by the European Central Bank (ECB), as Germany did on Thursday for the first time since March 2021.
But rather than the CPI, the indicator used by the Central Bank to compare inflation from one European country to another is the harmonized index of consumer prices (HICP), which for its part rose by 2.2% over one year in August (after +2.7% in July), indicates INSEE.
“The main difference between the HICP and the CPI concerns health expenditure: the HICP follows prices net of social security reimbursements while the CPI follows gross prices,” explains the Institute. An upward revision of the CPI during the second estimate, expected on September 13, also remains possible.
In May and June, INSEE revised its first inflation estimate upwards by 0.1 points.
