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Inflation drops to 5.1% over one year in May, according to INSEE

The beginning of a lasting decline? Inflation slowed markedly in May in France, to 5.

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Inflation drops to 5.1% over one year in May, according to INSEE

The beginning of a lasting decline? Inflation slowed markedly in May in France, to 5.1% over one year, after reaching 5.9% in April and more than 6% at the start of the year, according to the first estimate of INSEE unveiled this Wednesday. Such a low level of price increase over one year had not been seen for more than a year (4.8% in April 2022).

"This fall in inflation is due to the slowdown over one year in the prices of energy, food, manufactured goods and services", explains the national statistics institute, while "tobacco prices would accelerate for the third consecutive month.

In detail, it is mainly energy that is pulling inflation down, “in the wake of the price of petroleum products”. Energy prices rose 2% year on year in May, from 6.8% in April. Food prices also fell, but less markedly (14.1% after 15% in April).

Guest on France Inter this Wednesday morning, Bruno Le Maire welcomed this drop. “Inflation is slowing down, and it is even slowing down sharply. This is the first time in several months that we have seen inflation slow down in France, said the Minister of the Economy. We have always indicated with the government that at the start of the summer we will see inflation slow down, we are there, inflation is slowing down, and there are a certain number of prices which will start to fall. For several weeks, the tenant of Bercy has been repeating in effect anticipating a peak in inflation in mid-2023, after having repeatedly advanced, wrongly, this promise for a year.

The decline observed is greater than that anticipated by INSEE in its latest economic report, published in early May. The institute predicted inflation at 5.7% in May and 5.4% in June over one year. The level of the index next month will partly depend on the fate of the “anti-inflation quarter” launched by the government in March. Originally scheduled to end on June 15, it could be extended. In any case, this is the wish of the executive, who would like to see it last at least until the start of the school year in September. However, “the slight decline in headline inflation forecast for mid-2023 does not presume its evolution during the second half of the year”, specified INSEE at the beginning of the month.

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