inflation has not been so high in France for 37 years

Tuesday, May 31, inflation reached 5.2%. The biggest increases are felt in the food sector, where prices rose 4.2%, and energy, which rose 28%. France had not reached such a level of inflation since 1985, but it remains below the rates of the 70s and 80s, when the rise in prices exceeded 13%. “The industrial sectors are very impacted, metallurgy, chemicals, pharmaceuticals, electronics”notes Anne-Sophie Alsif, chief economist at BDO France.

With rising prices, household purchasing power fell by 1.9% in the first quarter of 2022. To respond to this, the government increased the Livret A rate in February 2022. An increase in wages could worsen the inflation. “When companies grant salary increases to their employees, they tend to pass on the increases to their selling price (…) that’s how the loop starts to click”explains Stéphanie Villers, economist.