An improvement in the situation is noted throughout the euro zone. This time, INSEE confirms the reflux directly in France.
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A little traditional reminder: a decline in inflation does not mean a fall in prices but a slowdown in their rise. Concretely: when we say that inflation is calming, it means that prices continue to increase but less quickly. What is it in fact? On Wednesday May 15, INSEE confirmed its first estimate according to which in April, over one year, prices in France increased by 2.2%, a slight slowdown compared to the 2.3% observed in March.
A difference of 0.1% less is not huge but it is significant. Firstly because the slowdown continues month after month. Then, and above all, this modest but general decline in inflation results from the slowdown in energy prices and food prices, the two main items which affect the purchasing power of households. In March, food inflation was +1.7%; in April, we went down to +1.2%. The only downside is that this general dynamic is put into perspective by the 3% increase in the price of services over the same period.
The other news is that we are getting closer and closer to the inflation target set by the European Central Bank. This objective is inflation around 2%. We are almost there and that is the other encouraging factor. Inflation, when it is under control, is not a shameful disease, on the contrary. A normal rate of inflation allows companies to maintain an acceptable price level for their production and continue to provide wages, unlike deflation (sustainable decline in the general price level), which devalues a company’s production and reduces therefore the room for salary maneuver.
The improvement recorded in recent months in the price index does not rule out the necessary reflection on the evolution of employee remuneration, but the slowdown in the price rise which is taking place is a notable, positive factor in our daily.