inflation will reach between 3.7% and 4.4% in 2022, according to the Banque de France

Inflation will stay “high throughout 2022”, particularly because of the consequences of the war in Ukraine, the Banque de France estimated on Sunday 13 March. Iharmonized index of consumer prices (HICP) should thus reach 3.7% or 4.4% over one year, according to two distinct scenarios. High inflation will be fueled by energy prices, but also those of food whose rate of increase “should increase significantly in the coming months”according to the central bank.

The HICP, qwhich allows comparisons at European level and takes energy prices more into account than the national consumer price index (CPI) put forward by INSEE, amounted to 4.1% over a year in France in February. It should, according to the models carried out by the Banque de France before the war, return to around 2% before the end of 2022.

Another consequence of the conflict, according to the institution: the growth of the French economy should be reduced by 0.5 to 1.1 points in 2022. The French gross domestic product (GDP) will increase by 3.4% in 2022 if the oil prices average over the year at 93 dollars, but only 2.8% if the price reaches 119 dollars, the central bank said. She added that, had it not been for the war, she would have raised her growth forecast from 3.6% to 3.9% for the year.

For 2023 and 2024, the Banque de France forecasts that growth will decrease to 2% then to 1.4% in the first scenario, qualified as “conventional”and at 1.3% then at 1.1% in the second called “degraded”. The director general of the institution specified during a press conference that these “two scenarios are possible”. He added that he was unable “to say which is the most probable” and that there could be others. The Banque de France has thus not calculated the effect that a halt in Russian gas and oil supplies would have.