Inflation shows a clear slowdown for the month of January 2024, with consumer prices rising by an average of 3.1% year-on-year. But the food situation is still tense, as negotiations between manufacturers and distributors have just come to an end. What will be the year’s trends?
Inflation slows in January 2024
3.1% year-on-year: that’s the rise in inflation over one year in January 2024, according to provisional data published by Insee. This represents a clear slowdown compared with December, when inflation was +3.7%. This is due to the year-on-year slowdown in prices in several sectors: energy, food and manufactured goods. Conversely, tobacco and services prices rose:
“Tobacco prices would be up sharply, while those for food, services and energy would increase slightly over one month. “
By way of comparison, the inflation rate reached +6% in January 2023. Food was particularly under pressure, with +13.3% (vs. +5.7% currently). There was also a marked slowdown in the rise in manufactured goods (+0.7% in January).
Consumer price index trends since 2017
As a reminder, both the Ministry of Finance and the Banque de France expect inflation to fall below 3% in the first quarter of 2024. This figure was confirmed by Bruno Le Maire yesterday, before the publication of the INSEE figures.
Food and electricity prices will continue to rise
However, the food sector is crystallizing difficulties, as negotiations between manufacturers and distributors have just come to an end. Although tense, they have resulted in lower prices for certain products, including coffee, pasta, charcuterie and hygiene products. But overall, prices will continue to rise, according to the CEO of Système U:
“We’ve accepted this increase, it’s the law […] there will be a repercussion. “
Although energy prices have fallen, you can also expect a net increase this month: electricity tariffs are set to rise again on February 1. You can expect an increase of between 8.6% and 9.8%, due to the phasing-out of the “tariff shield” introduced in recent years.
While average annual inflation may no longer reach the peaks seen in 2022 and 2023, it remains a major concern for many French people.
